II 

112TH CONGRESS 

1ST SESSION S. 915 

To provide for health care for every American and to control the cost and 

enhance the quality of the health care system. 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2011 

Mr. SANDERS introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To provide for health care for every American and to control 

the cost and enhance the quality of the health care system. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Health Secu5 rity Act of 2011’’. 

6 SEC. 2. FINDINGS; SENSE OF THE SENATE. 

7 (a) FINDINGS.—Congress finds as follows: 

8 (1) While the United States of America spends 

9 on average nearly twice as much per capita on 

10 health care services as the next most costly nation, 

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1 the United States ranks 32d among all nations on 

2 life expectancy, and 41st on infant mortality. 

3 (2) The number of uninsured Americans rose 

4 by more than 4,000,000 between 2008 and 2009 to 

5 a total of 51,000,000, or more than 1 of every 6 

6 Americans. 

7 (3) This rise in the number of uninsured Amer8 icans was the largest single-year increase since 1987 

9 and was the result of a continued decline in private 

10 health coverage, primarily in employer-sponsored in11 surance. 

12 (4) Small businesses around the country cannot 

13 afford to reinvest in their companies and create new 

14 jobs because their health care bills are going up 10 

15 or 15 percent every year. 

16 (5) American businesses are at an economic dis17 advantage, because their health care costs are so 

18 much higher than in other countries. Notably, auto19 mobile manufacturers spend more on health care per 

20 automobile than on steel. 

21 (b) SENSE OF THE SENATE CONCERNING URGENCY

22 OF A MEDICARE-FOR-ALL TYPE SINGLE PAYER HEALTH

23 CARE SYSTEM.—It is the sense of the Senate that the 

24 112th Congress should enact a Medicare-for-All Single 

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1 Payer Health Care System to make American companies 

2 more competitive and to stimulate job creation. 

3 (c) SENSE OF THE SENATE CONCERNING THE STA4 TUS OF HEALTH CARE.—It is the sense of the Senate that 

5 the 112th Congress should recognize and proclaim that 

6 health care is a human right. 

7 (d) SENSE OF THE SENATE CONCERNING STATE

8 FLEXIBILITY.—It is the sense of the Senate that in order 

9 to provide high quality health care coverage for all Ameri10 cans while controlling costs in order to make American 

11 companies more competitive, individual States should be 

12 given maximum flexibility in designing health care pro13 grams to improve the individual experience of care and 

14 the health of populations, and to reduce the per capita 

15 costs of care for each State. 

16 (e) SENSE OF THE SENATE CONCERNING A NEW

17 HEALTH CARE SYSTEM.—It is the sense of the Senate 

18 that— 

19 (1) a new single payer health care system 

20 should build on achievements and commitments in 

21 the Patient Protection and Affordable Care Act 

22 (Public Law 111–148) and the Health Care and 

23 Education Reconciliation Act of 2010 (Public Law 

24 111–152), to strengthen primary care and public 

25 health, to raise the quality of patient care, to demstockstill on DSKH9S0YB1PROD with BILLS

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1 velop new models of patient care, to develop the ca2 pacity of the healthcare workforce, to increase trans3 parency in the payment of health care system costs, 

4 and to strengthen enforcement against fraud and 

5 abuse; 

6 (2) the possibilities of achieving efficiencies 

7 through integrated care are within reach with the 

8 spread of electronic support systems, health informa9 tion exchanges, and the possibilities for virtual inte10 gration and instant communication; and 

11 (3) policies should be put in place to ensure 

12 higher quality, better prevention, and lower per cap13 ita costs, including— 

14 (A) global budget caps on total health care 

15 spending; 

16 (B) measurement of and fixed account17 ability for the health status and health needs of 

18 designated populations; 

19 (C) improved standardized measures of 

20 care and per capita costs across sites and 

21 through time that are transparent; and 

22 (D) changes in professional education cur23 ricula to ensure that clinicians are enabled to 

24 change and improve their processes of care. 

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1 SEC. 3. TABLE OF CONTENTS. 

2 The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Findings; sense of the Senate. 

Sec. 3. Table of contents. 

TITLE I—ESTABLISHMENT OF A STATE-BASED AMERICAN 

HEALTH SECURITY PROGRAM; UNIVERSAL ENTITLEMENT; ENROLLMENT 

Sec. 101. Establishment of a State-based American Health Security Program. 

Sec. 102. Universal entitlement. 

Sec. 103. Enrollment. 

Sec. 104. Portability of benefits. 

Sec. 105. Effective date of benefits. 

Sec. 106. Relationship to existing Federal health programs. 

Sec. 107. Repeal of provisions related to the State exchanges. 

TITLE II—COMPREHENSIVE BENEFITS, INCLUDING PREVENTIVE 

BENEFITS AND BENEFITS FOR LONG-TERM CARE 

Sec. 201. Comprehensive benefits. 

Sec. 202. Definitions relating to services. 

Sec. 203. Special rules for home and community-based long-term care services. 

Sec. 204. Exclusions and limitations. 

Sec. 205. Certification; quality review; plans of care. 

TITLE III—PROVIDER PARTICIPATION 

Sec. 301. Provider participation and standards. 

Sec. 302. Qualifications for providers. 

Sec. 303. Qualifications for comprehensive health service organizations. 

Sec. 304. Limitation on certain physician referrals. 

TITLE IV—ADMINISTRATION 

Subtitle A—General Administrative Provisions 

Sec. 401. American Health Security Standards Board. 

Sec. 402. American Health Security Advisory Council. 

Sec. 403. Consultation. 

Sec. 404. State health security programs. 

Sec. 405. Complementary conduct of related health programs. 

Subtitle B—Control Over Fraud and Abuse 

Sec. 411. Application of Federal sanctions to all fraud and abuse under American Health Security Program. 

Sec. 412. Requirements for operation of State health care fraud and abuse control units. 

TITLE V—QUALITY ASSESSMENT 

Sec. 501. American Health Security Quality Council. 

Sec. 502. Development of certain methodologies, guidelines, and standards. 

Sec. 503. State quality review programs. 

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Sec. 504. Elimination of utilization review programs; transition. 

Sec. 505. Application of Center for Medicare and Medicaid Innovation to American Health Security Program. 

TITLE VI—HEALTH SECURITY BUDGET; PAYMENTS; COST 

CONTAINMENT MEASURES 

Subtitle A—Budgeting and Payments to States 

Sec. 601. National health security budget. 

Sec. 602. Computation of individual and State capitation amounts. 

Sec. 603. State health security budgets. 

Sec. 604. Federal payments to States. 

Sec. 605. Account for health professional education expenditures. 

Subtitle B—Payments by States to Providers 

Sec. 611. Payments to hospitals and other facility-based services for operating 

expenses on the basis of approved global budgets. 

Sec. 612. Payments to health care practitioners based on prospective fee schedule. 

Sec. 613. Payments to comprehensive health service organizations. 

Sec. 614. Payments for community-based primary health services. 

Sec. 615. Payments for prescription drugs. 

Sec. 616. Payments for approved devices and equipment. 

Sec. 617. Payments for other items and services. 

Sec. 618. Payment incentives for medically underserved areas. 

Sec. 619. Authority for alternative payment methodologies. 

Subtitle C—Mandatory Assignment and Administrative Provisions 

Sec. 631. Mandatory assignment. 

Sec. 632. Procedures for reimbursement; appeals. 

TITLE VII—PROMOTION OF PRIMARY HEALTH CARE; DEVELOPMENT OF HEALTH SERVICE CAPACITY; PROGRAMS TO ASSIST 

THE MEDICALLY UNDERSERVED 

Subtitle A—Promotion and Expansion of Primary Care Professional Training 

Sec. 701. Role of Board; establishment of primary care professional output 

goals. 

Sec. 702. Grants for health professions education, nurse education, and the National Health Service Corps. 

Subtitle B—Direct Health Care Delivery 

Sec. 711. Set-aside for public health. 

Sec. 712. Set-aside for primary health care delivery. 

Sec. 713. Primary care service expansion grants. 

Subtitle C—Primary Care and Outcomes Research 

Sec. 721. Set-aside for outcomes research. 

Sec. 722. Office of Primary Care and Prevention Research. 

Subtitle D—School-Related Health Services 

Sec. 731. Authorizations of appropriations. 

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Sec. 732. Eligibility for development and operation grants. 

Sec. 733. Preferences. 

Sec. 734. Grants for development of projects. 

Sec. 735. Grants for operation of projects. 

Sec. 736. Federal administrative costs. 

Sec. 737. Definitions. 

TITLE VIII—FINANCING PROVISIONS; AMERICAN HEALTH 

SECURITY TRUST FUND 

Sec. 800. Amendment of 1986 code; Section 15 not to apply. 

Subtitle A—American Health Security Trust Fund 

Sec. 801. American Health Security Trust Fund. 

Subtitle B—Taxes Based on Income and Wages 

Sec. 811. Payroll tax on employers. 

Sec. 812. Health care income tax. 

Sec. 813. Surcharge on high income individuals. 

Subtitle C—Other Financing Provisions 

Sec. 821. Tax on Securities Transactions. 

TITLE IX—CONFORMING AMENDMENTS TO THE EMPLOYEE 

RETIREMENT INCOME SECURITY ACT OF 1974 

Sec. 901. ERISA inapplicable to health coverage arrangements under State 

health security programs. 

Sec. 902. Exemption of State health security programs from ERISA preemption. 

Sec. 903. Prohibition of employee benefits duplicative of benefits under State 

health security programs; coordination in case of workers’ compensation. 

Sec. 904. Repeal of continuation coverage requirements under ERISA and certain other requirements relating to group health plans. 

Sec. 905. Effective date of title. 

TITLE X—ADDITIONAL CONFORMING AMENDMENTS 

Sec. 1001. Repeal of certain provisions in Internal Revenue Code of 1986. 

Sec. 1002. Repeal of certain provisions in the Employee Retirement Income Security Act of 1974. 

Sec. 1003. Repeal of certain provisions in the Public Health Service Act and 

related provisions. 

Sec. 1004. Effective date of title. 

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1 TITLE I—ESTABLISHMENT OF A 

2 STATE-BASED AMERICAN 

3 HEALTH SECURITY PRO4 GRAM; UNIVERSAL ENTITLE5 MENT; ENROLLMENT 

6 SEC. 101. ESTABLISHMENT OF A STATE-BASED AMERICAN 

7 HEALTH SECURITY PROGRAM. 

8 (a) IN GENERAL.—There is hereby established in the 

9 United States a State-Based American Health Security 

10 Program to be administered by the individual States in 

11 accordance with Federal standards specified in, or estab12 lished under, this Act. 

13 (b) STATE HEALTH SECURITY PROGRAMS.—In order 

14 for a State to be eligible to receive payment under section 

15 604, a State shall establish a State health security pro16 gram in accordance with this Act. 

17 (c) STATE DEFINED.— 

18 (1) IN GENERAL.—In this Act, subject to para19 graph (2), the term ‘‘State’’ means each of the 50 

20 States and the District of Columbia. 

21 (2) ELECTION.—If the Governor of Puerto 

22 Rico, the Virgin Islands, Guam, American Samoa, or 

23 the Northern Mariana Islands certifies to the Presi24 dent that the legislature of the Commonwealth or 

25 territory has enacted legislation desiring that the 

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1 Commonwealth or territory be included as a State 

2 under the provisions of this Act, such Common3 wealth or territory shall be included as a ‘‘State’’ 

4 under this Act beginning January 1 of the first year 

5 beginning 90 days after the President receives the 

6 notification. 

7 SEC. 102. UNIVERSAL ENTITLEMENT. 

8 (a) IN GENERAL.—Every individual who is a resident 

9 of the United States and is a citizen or national of the 

10 United States or lawful resident alien (as defined in sub11 section (d)) is entitled to benefits for health care services 

12 under this Act under the appropriate State health security 

13 program. In this section, the term ‘‘appropriate State 

14 health security program’’ means, with respect to an indi15 vidual, the State health security program for the State in 

16 which the individual maintains a primary residence. 

17 (b) TREATMENT OF CERTAIN NONIMMIGRANTS.— 

18 (1) IN GENERAL.—The American Health Secu19 rity Standards Board (in this Act referred to as the 

20 ‘‘Board’’) may make eligible for benefits for health 

21 care services under the appropriate State health se22 curity program under this Act such classes of aliens 

23 admitted to the United States as nonimmigrants as 

24 the Board may provide. 

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1 (2) CONSIDERATION.—In providing for eligi2 bility under paragraph (1), the Board shall consider 

3 reciprocity in health care services offered to United 

4 States citizens who are nonimmigrants in other for5 eign states, and such other factors as the Board de6 termines to be appropriate. 

7 (c) TREATMENT OF OTHER INDIVIDUALS.— 

8 (1) BY BOARD.—The Board also may make eli9 gible for benefits for health care services under the 

10 appropriate State health security program under this 

11 Act other individuals not described in subsection (a) 

12 or (b), and regulate the nature of the eligibility of 

13 such individuals, in order— 

14 (A) to preserve the public health of com15 munities; 

16 (B) to compensate States for the addi17 tional health care financing burdens created by 

18 such individuals; and 

19 (C) to prevent adverse financial and med20 ical consequences of uncompensated care, 

21 while inhibiting travel and immigration to the 

22 United States for the sole purpose of obtaining 

23 health care services. 

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1 (2) BY STATES.—Any State health security pro2 gram may make individuals described in paragraph 

3 (1) eligible for benefits at the expense of the State. 

4 (d) LAWFUL RESIDENT ALIEN DEFINED.—For pur5 poses of this section, the term ‘‘lawful resident alien’’ 

6 means an alien lawfully admitted for permanent residence 

7 and any other alien lawfully residing permanently in the 

8 United States under color of law, including an alien with 

9 lawful temporary resident status under section 210, 210A, 

10 or 234A of the Immigration and Nationality Act (8 U.S.C. 

11 1160, 1161, or 1255a). 

12 SEC. 103. ENROLLMENT. 

13 (a) IN GENERAL.—Each State health security pro14 gram shall provide a mechanism for the enrollment of indi15 viduals entitled or eligible for benefits under this Act. The 

16 mechanism shall— 

17 (1) include a process for the automatic enroll18 ment of individuals at the time of birth in the 

19 United States and at the time of legal immigration 

20 into the United States or other acquisition of lawful 

21 resident status in the United States; 

22 (2) provide for the enrollment, as of January 1, 

23 2013, of all individuals who are eligible to be en24 rolled as of such date; and 

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1 (3) include a process for the enrollment of indi2 viduals made eligible for health care services under 

3 subsections (b) and (c) of section 102. 

4 (b) AVAILABILITY OF APPLICATIONS.—Each State 

5 health security program shall make applications for enroll6 ment under the program available— 

7 (1) at employment and payroll offices of em8 ployers located in the State; 

9 (2) at local offices of the Social Security Ad10 ministration; 

11 (3) at social services locations; 

12 (4) at out-reach sites (such as provider and 

13 practitioner locations, especially community health 

14 centers); and 

15 (5) at other locations (including post offices 

16 and schools) accessible to a broad cross-section of in17 dividuals eligible to enroll. 

18 (c) ISSUANCE OF HEALTH SECURITY CARDS.—In 

19 conjunction with an individual’s enrollment for benefits 

20 under this Act, the State health security program shall 

21 provide for the issuance of a health security card (to be 

22 referred to as a ‘‘smart card’’) that shall be used for pur23 poses of identification and processing of claims for bene24 fits under the program. The State health security program 

25 may provide for issuance of such cards by employers for 

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1 purposes of carrying out enrollment pursuant to sub2 section (a)(2). 

3 SEC. 104. PORTABILITY OF BENEFITS. 

4 (a) IN GENERAL.—To ensure continuous access to 

5 benefits for health care services covered under this Act, 

6 each State health security program— 

7 (1) shall not impose any minimum period of 

8 residence in the State before residents of the State 

9 are entitled to, or eligible for, such benefits under 

10 the program; 

11 (2) shall provide continuation of payment for 

12 covered health care services to individuals who have 

13 terminated their residence in the State and estab14 lished their residence in another State, for the dura15 tion of any waiting period imposed in the State of 

16 new residency for establishing entitlement to, or eli17 gibility for, such services; and 

18 (3) shall provide for the payment for health 

19 care services covered under this Act provided to indi20 viduals while temporarily absent from the State 

21 based on the following principles: 

22 (A) Payment for such health care services 

23 is at the rate that is approved by the State 

24 health security program in the State in which 

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1 cerned agree to apportion the cost between 

2 them in a different manner. 

3 (B) Payment for such health care services 

4 provided outside the United States is made on 

5 the basis of the amount that would have been 

6 paid by the State health security program for 

7 similar services rendered in the State, with due 

8 regard, in the case of hospital services, to the 

9 size of the hospital, standards of service, and 

10 other relevant factors. 

11 (b) CROSS-BORDER ARRANGEMENTS.—A State 

12 health security program for a State may negotiate with 

13 such a program in an adjacent State a reciprocal arrange14 ment for the coverage under such other program of health 

15 care services to enrollees residing in the border region. 

16 SEC. 105. EFFECTIVE DATE OF BENEFITS. 

17 Benefits shall first be available under this Act for 

18 items and services furnished on or after January 1, 2013. 

19 SEC. 106. RELATIONSHIP TO EXISTING FEDERAL HEALTH 

20 PROGRAMS. 

21 (a) MEDICARE, MEDICAID AND STATE CHILDREN’S

22 HEALTH INSURANCE PROGRAM (SCHIP).— 

23 (1) IN GENERAL.—Notwithstanding any other 

24 provision of law, subject to paragraph (2)— 

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1 (A) no benefits shall be available under 

2 title XVIII of the Social Security Act for any 

3 item or service furnished after December 31, 

4 2012; 

5 (B) no individual is entitled to medical as6 sistance under a State plan approved under 

7 title XIX of such Act for any item or service 

8 furnished after such date; 

9 (C) no individual is entitled to medical as10 sistance under an SCHIP plan under title XXI 

11 of such Act for any item or service furnished 

12 after such date; and 

13 (D) no payment shall be made to a State 

14 under section 1903(a) or 2105(a) of such Act 

15 with respect to medical assistance or child 

16 health assistance for any item or service fur17 nished after such date. 

18 (2) TRANSITION.—In the case of inpatient hos19 pital services and extended care services during a 

20 continuous period of stay which began before Janu21 ary 1, 2013, and which had not ended as of such 

22 date, for which benefits are provided under title 

23 XVIII, under a State plan under title XIX, or a 

24 State child health plan under title XXI, of the Social 

25 Security Act, the Secretary of Health and Human 

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1 Services and each State plan, respectively, shall pro2 vide for continuation of benefits under such title or 

3 plan until the end of the period of stay. 

4 (b) FEDERAL EMPLOYEES HEALTH BENEFITS PRO5 GRAM.—No benefits shall be made available under chapter 

6 89 of title 5, United States Code, for any part of a cov7 erage period occurring after December 31, 2012. 

8 (c) TRICARE.—No benefits shall be made available 

9 under sections 1079 and 1086 of title 10, United States 

10 Code, for items or services furnished after December 31, 

11 2012. 

12 (d) TREATMENT OF BENEFITS FOR VETERANS AND

13 NATIVE AMERICANS.—Nothing in this Act shall affect the 

14 eligibility of veterans for the medical benefits and services 

15 provided under title 38, United States Code, or of Indians 

16 for the medical benefits and services provided by or 

17 through the Indian Health Service. 

18 (e) TREATMENT OF PREMIUM CREDITS, COST-SHAR19 ING REDUCTIONS, AND SMALL EMPLOYER CREDITS.— 

20 (1) IN GENERAL.—For each calendar year, the 

21 Secretary of the Treasury shall transfer to the 

22 American Health Security Trust Fund an amount 

23 equal to the sum of— 

24 (A) the premium assistance credit amount 

25 which would have been allowable to taxpayers 

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1 residing in such State in such calendar year 

2 under section 36B of the Internal Revenue 

3 Code of 1986 (relating to refundable credit for 

4 coverage under a qualified health plan), as 

5 added by section 1401 of the Patient Protection 

6 and Affordable Care Act, if such section were in 

7 effect for such year, 

8 (B) the amount of cost-sharing reductions 

9 which would have been required with respect to 

10 eligible insured residing in such State in such 

11 calendar year under section 1402 of the Patient 

12 Protection and Affordable Care Act if such sec13 tion were in effect for such year, plus 

14 (C) the amount of tax credits which would 

15 have been allowable to eligible small employers 

16 doing business in such State in such calendar 

17 year under section 45R of the Internal Revenue 

18 Code of 1986 if such section were in effect for 

19 such calendar year. 

20 (2) DETERMINATION.—The amounts deter21 mined under paragraph (1) shall be estimated by the 

22 Secretary of the Treasury in consultation with the 

23 Secretary of Health and Human Services. 

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1 SEC. 107. REPEAL OF PROVISIONS RELATED TO THE STATE 

2 EXCHANGES. 

3 Title I of the Patient Protection and Affordable Care 

4 Act (Public Law 111–148) (and the amendments made 

5 by title I) is repealed. 

6 TITLE II—COMPREHENSIVE BEN7 EFITS, INCLUDING PREVEN8 TIVE BENEFITS AND BENE9 FITS FOR LONG-TERM CARE 

10 SEC. 201. COMPREHENSIVE BENEFITS. 

11 (a) IN GENERAL.—Subject to the succeeding provi12 sions of this title, individuals enrolled for benefits under 

13 this Act are entitled to have payment made under a State 

14 health security program for the following items and serv15 ices if medically necessary or appropriate for the mainte16 nance of health or for the diagnosis, treatment, or rehabili17 tation of a health condition: 

18 (1) HOSPITAL SERVICES.—Inpatient and out19 patient hospital care, including 24-hour-a-day emer20 gency services. 

21 (2) PROFESSIONAL SERVICES.—Professional 

22 services of health care practitioners authorized to 

23 provide health care services under State law, includ24 ing patient education and training in self-manage25 ment techniques. 

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1 (3) COMMUNITY-BASED PRIMARY HEALTH

2 SERVICES.—Community-based primary health serv3 ices (as defined in section 202(a)). 

4 (4) PREVENTIVE SERVICES.—Preventive serv5 ices (as defined in section 202(b)). 

6 (5) LONG-TERM, ACUTE, AND CHRONIC CARE

7 SERVICES.— 

8 (A) Nursing facility services. 

9 (B) Home health services. 

10 (C) Home and community-based long-term 

11 care services (as defined in section 202(c)) for 

12 individuals described in section 203(a). 

13 (D) Hospice care. 

14 (E) Services in intermediate care facilities 

15 for individuals with an intellectual disability. 

16 (6) PRESCRIPTION DRUGS, BIOLOGICALS, INSU17 LIN, MEDICAL FOODS.— 

18 (A) Outpatient prescription drugs and bio19 logics, as specified by the Board consistent with 

20 section 615. 

21 (B) Insulin. 

22 (C) Medical foods (as defined in section 

23 202(e)). 

24 (7) DENTAL SERVICES.—Dental services (as de25 fined in section 202(h)). 

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1 (8) MENTAL HEALTH AND SUBSTANCE ABUSE

2 TREATMENT SERVICES.—Mental health and sub3 stance abuse treatment services (as defined in sec4 tion 202(f)). 

5 (9) DIAGNOSTIC TESTS.—Diagnostic tests. 

6 (10) OTHER ITEMS AND SERVICES.— 

7 (A) OUTPATIENT THERAPY.—Outpatient 

8 physical therapy services, outpatient speech pa9 thology services, and outpatient occupational 

10 therapy services in all settings. 

11 (B) DURABLE MEDICAL EQUIPMENT.—Du12 rable medical equipment. 

13 (C) HOME DIALYSIS.—Home dialysis sup14 plies and equipment. 

15 (D) AMBULANCE.—Emergency ambulance 

16 service. 

17 (E) PROSTHETIC DEVICES.—Prosthetic de18 vices, including replacements of such devices. 

19 (F) ADDITIONAL ITEMS AND SERVICES.— 

20 Such other medical or health care items or serv21 ices as the Board may specify. 

22 (b) PROHIBITION OF BALANCE BILLING.—As pro23 vided in section 531, no person may impose a charge for 

24 covered services for which benefits are provided under this 

25 Act. 

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1 (c) NO DUPLICATE HEALTH INSURANCE.—Each 

2 State health security program shall prohibit the sale of 

3 health insurance in the State if payment under the insur4 ance duplicates payment for any items or services for 

5 which payment may be made under such a program. 

6 (d) STATE PROGRAM MAY PROVIDE ADDITIONAL

7 BENEFITS.—Nothing in this Act shall be construed as 

8 limiting the benefits that may be made available under a 

9 State health security program to residents of the State 

10 at the expense of the State. 

11 (e) EMPLOYERS MAY PROVIDE ADDITIONAL BENE12 FITS.—Nothing in this Act shall be construed as limiting 

13 the additional benefits that an employer may provide to 

14 employees or their dependents, or to former employees or 

15 their dependents. 

16 (f) TAFT-HARTLEY AND MEW BENEFIT PLANS.— 

17 Notwithstanding any other provision of law, a health plan 

18 may be provided for under a collective bargaining agree19 ment or a MEWA if such plan is limited to coverage that 

20 is supplemental to the coverage provided for under the 

21 State-based American Health Security Program and avail22 able only to employees or their dependents or to retirees 

23 or their dependents. 

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1 SEC. 202. DEFINITIONS RELATING TO SERVICES. 

2 (a) COMMUNITY-BASED PRIMARY HEALTH SERV3 ICES.—In this title, the term ‘‘community-based primary 

4 health services’’ means ambulatory health services fur5 nished— 

6 (1) by a rural health clinic; 

7 (2) by a federally qualified health center (as de8 fined in section 1905(l)(2)(B) of the Social Security 

9 Act), and which, for purposes of this Act, include 

10 services furnished by State and local health agencies; 

11 (3) in a school-based setting; 

12 (4) by public educational agencies and other 

13 providers of services to children entitled to assist14 ance under the Individuals with Disabilities Edu15 cation Act for services furnished pursuant to a writ16 ten Individualized Family Services Plan or Indi17 vidual Education Plan under such Act; and 

18 (5) public and private nonprofit entities receiv19 ing Federal assistance under the Public Health 

20 Service Act. 

21 (b) PREVENTIVE SERVICES.— 

22 (1) IN GENERAL.—In this title, the term ‘‘pre23 ventive services’’ means items and services— 

24 (A) which— 

25 (i) are specified in paragraph (2); or 

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1 (ii) the Board determines to be effec2 tive in the maintenance and promotion of 

3 health or minimizing the effect of illness, 

4 disease, or medical condition; and 

5 (B) which are provided consistent with the 

6 periodicity schedule established under para7 graph (3). 

8 (2) SPECIFIED PREVENTIVE SERVICES.—The 

9 services specified in this paragraph are as follows: 

10 (A) Immunizations recommended by the 

11 Advisory Committee on Immunization Practices 

12 of the Centers for Disease Control and Preven13 tion. 

14 (B) Prenatal and well-baby care (for in15 fants under 1 year of age). 

16 (C) Well-child care (including periodic 

17 physical examinations, hearing and vision 

18 screening, and developmental screening and ex19 aminations) for individuals under 18 years of 

20 age, including evidence-informed preventive care 

21 and screenings included in the comprehensive 

22 guidelines of the Health Resources and Services 

23 Administration. 

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1 (D) Periodic screening mammography, Pap 

2 smears, and colorectal examinations and exami3 nations for prostate cancer. 

4 (E) Physical examinations. 

5 (F) Family planning services. 

6 (G) Routine eye examinations, eyeglasses, 

7 and contact lenses. 

8 (H) Hearing aids, but only upon a deter9 mination of a certified audiologist or physician 

10 that a hearing problem exists and is caused by 

11 a condition that can be corrected by use of a 

12 hearing aid. 

13 (I) Evidence-based items or services that 

14 have in effect a rating of ‘‘A’’ or ‘‘B’’ in the 

15 current recommendations of the United States 

16 Preventive Services Task Force. 

17 (J) With respect to women, such additional 

18 preventive care and screenings not described in 

19 subparagraph (I) that are included in the com20 prehensive guidelines of the Health Resources 

21 and Services Administration. 

22 (3) SCHEDULE.—The Board shall establish, in 

23 consultation with experts in preventive medicine and 

24 public health and taking into consideration those 

25 preventive services recommended by the Preventive 

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1 Services Task Force and published as the Guide to 

2 Clinical Preventive Services, a periodicity schedule 

3 for the coverage of preventive services under para4 graph (1). Such schedule shall take into consider5 ation the cost-effectiveness of appropriate preventive 

6 care and shall be revised not less frequently than 

7 once every 5 years, in consultation with experts in 

8 preventive medicine and public health. 

9 (c) HOME AND COMMUNITY-BASED LONG-TERM

10 CARE SERVICES.—In this title, the term ‘‘home and com11 munity-based long-term care services’’ means the following 

12 services provided to an individual to enable the individual 

13 to remain in such individual’s place of residence within 

14 the community: 

15 (1) Home health aide services. 

16 (2) Adult day health care, social day care or 

17 psychiatric day care. 

18 (3) Medical social work services. 

19 (4) Care coordination services, as defined in 

20 subsection (g)(1). 

21 (5) Respite care, including training for informal 

22 caregivers. 

23 (6) Personal assistance services, and home24 maker services (including meals) incidental to the 

25 provision of personal assistance services. 

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1 (d) HOME HEALTH SERVICES.— 

2 (1) IN GENERAL.—The term ‘‘home health 

3 services’’ means items and services described in sec4 tion 1861(m) of the Social Security Act and includes 

5 home infusion services. 

6 (2) HOME INFUSION SERVICES.—The term 

7 ‘‘home infusion services’’ includes the nursing, phar8 macy, and related services that are necessary to con9 duct the home infusion of a drug regimen safely and 

10 effectively under a plan established and periodically 

11 reviewed by a physician and that are provided in 

12 compliance with quality assurance requirements es13 tablished by the Secretary. 

14 (e) MEDICAL FOODS.—In this title, the term ‘‘med15 ical foods’’ means foods which are formulated to be con16 sumed or administered enterally under the supervision of 

17 a physician and which are intended for the specific dietary 

18 management of a disease or condition for which distinctive 

19 nutritional requirements, based on recognized scientific 

20 principles, are established by medical evaluation. 

21 (f) MENTAL HEALTH AND SUBSTANCE ABUSE

22 TREATMENT SERVICES.— 

23 (1) SERVICES DESCRIBED.—In this title, the 

24 term ‘‘mental health and substance abuse treatment 

25 services’’ means the following services related to the 

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1 prevention, diagnosis, treatment, and rehabilitation 

2 of mental illness and promotion of mental health: 

3 (A) INPATIENT HOSPITAL SERVICES.—In4 patient hospital services furnished primarily for 

5 the diagnosis or treatment of mental illness or 

6 substance abuse if (with respect to services fur7 nished to an individual described in section 

8 204(b)(1)) such services are furnished in con9 formity with the plan of an organized system of 

10 care for mental health and substance abuse 

11 services in accordance with section 204(b)(2). 

12 (B) INTENSIVE RESIDENTIAL SERVICES.— 

13 Intensive residential services (as defined in 

14 paragraph (2)). 

15 (C) OUTPATIENT SERVICES.—Outpatient 

16 treatment services of mental illness or sub17 stance abuse (other than intensive community18 based services under subparagraph (D)) for an 

19 unlimited number of days during any calendar 

20 year furnished in accordance with standards es21 tablished by the Secretary for the management 

22 of such services, and, in the case of services fur23 nished to an individual described in section 

24 204(b)(1) who is not an inpatient of a hospital, 

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1 tem of care for mental health and substance 

2 abuse services in accordance with section 

3 204(b)(2). 

4 (D) INTENSIVE COMMUNITY-BASED SERV5 ICES.—Intensive community-based services (as 

6 described in paragraph (3)). 

7 (2) INTENSIVE RESIDENTIAL SERVICES DE8 FINED.— 

9 (A) IN GENERAL.—Subject to subpara10 graphs (B) and (C), the term ‘‘intensive resi11 dential services’’ means inpatient services pro12 vided in any of the following facilities: 

13 (i) Residential detoxification centers. 

14 (ii) Crisis residential programs or 

15 mental illness residential treatment pro16 grams. 

17 (iii) Therapeutic family or group 

18 treatment homes. 

19 (iv) Residential centers for substance 

20 abuse treatment. 

21 (B) REQUIREMENTS FOR FACILITIES.—No 

22 service may be treated as an intensive residen23 tial service under subparagraph (A) unless the 

24 facility at which the service is provided— 

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1 (i) is legally authorized to provide 

2 such service under the law of the State (or 

3 under a State regulatory mechanism pro4 vided by State law) in which the facility is 

5 located or is certified to provide such serv6 ice by an appropriate accreditation entity 

7 approved by the State in consultation with 

8 the Secretary; and 

9 (ii) meets such other requirements as 

10 the Secretary may impose to ensure the 

11 quality of the intensive residential services 

12 provided. 

13 (C) SERVICES FURNISHED TO AT-RISK

14 CHILDREN.—In the case of services furnished 

15 to an individual described in section 204(b)(1), 

16 no service may be treated as an intensive resi17 dential service under this subsection unless the 

18 service is furnished in conformity with the plan 

19 of an organized system of care for mental 

20 health and substance abuse services in accord21 ance with section 204(b)(2). 

22 (D) MANAGEMENT STANDARDS.—No serv23 ice may be treated as an intensive residential 

24 service under subparagraph (A) unless the serv25 ice is furnished in accordance with standards 

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1 established by the Secretary for the manage2 ment of such services. 

3 (3) INTENSIVE COMMUNITY-BASED SERVICES

4 DEFINED.— 

5 (A) IN GENERAL.—The term ‘‘intensive 

6 community-based services’’ means the items 

7 and services described in subparagraph (B) pre8 scribed by a physician (or, in the case of serv9 ices furnished to an individual described in sec10 tion 204(b)(1), by an organized system of care 

11 for mental health and substance abuse services 

12 in accordance with such section) and provided 

13 under a program described in subparagraph 

14 (D) under the supervision of a physician (or, to 

15 the extent permitted under the law of the State 

16 in which the services are furnished, a non-phy17 sician mental health professional) pursuant to 

18 an individualized, written plan of treatment es19 tablished and periodically reviewed by a physi20 cian (in consultation with appropriate staff par21 ticipating in such program) which sets forth the 

22 physician’s diagnosis, the type, amount, fre23 quency, and duration of the items and services 

24 provided under the plan, and the goals for 

25 treatment under the plan, but does not include 

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1 any item or service that is not furnished in ac2 cordance with standards established by the Sec3 retary for the management of such services. 

4 (B) ITEMS AND SERVICES DESCRIBED.— 

5 The items and services described in this sub6 paragraph are— 

7 (i) partial hospitalization services con8 sisting of the items and services described 

9 in subparagraph (C); 

10 (ii) psychiatric rehabilitation services; 

11 (iii) day treatment services for indi12 viduals under 19 years of age; 

13 (iv) in-home services; 

14 (v) case management services, includ15 ing collateral services designated as such 

16 case management services by the Sec17 retary; 

18 (vi) ambulatory detoxification services; 

19 and 

20 (vii) such other items and services as 

21 the Secretary may provide (but in no event 

22 to include meals and transportation), 

23 that are reasonable and necessary for the diag24 nosis or active treatment of the individual’s 

25 condition, reasonably expected to improve or 

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1 maintain the individual’s condition and func2 tional level and to prevent relapse or hos3 pitalization, and furnished pursuant to such 

4 guidelines relating to frequency and duration of 

5 services as the Secretary shall by regulation es6 tablish (taking into account accepted norms of 

7 medical practice and the reasonable expectation 

8 of patient improvement). 

9 (C) ITEMS AND SERVICES INCLUDED AS

10 PARTIAL HOSPITALIZATION SERVICES.—For 

11 purposes of subparagraph (B)(i), partial hos12 pitalization services consist of the following: 

13 (i) Individual and group therapy with 

14 physicians or psychologists (or other men15 tal health professionals to the extent au16 thorized under State law). 

17 (ii) Occupational therapy requiring 

18 the skills of a qualified occupational thera19 pist. 

20 (iii) Services of social workers, trained 

21 psychiatric nurses, behavioral aides, and 

22 other staff trained to work with psychiatric 

23 patients (to the extent authorized under 

24 State law). 

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1 (iv) Drugs and biologicals furnished 

2 for therapeutic purposes (which cannot, as 

3 determined in accordance with regulations, 

4 be self-administered). 

5 (v) Individualized activity therapies 

6 that are not primarily recreational or di7 versionary. 

8 (vi) Family counseling (the primary 

9 purpose of which is treatment of the indi10 vidual’s condition). 

11 (vii) Patient training and education 

12 (to the extent that training and edu13 cational activities are closely and clearly 

14 related to the individual’s care and treat15 ment). 

16 (viii) Diagnostic services. 

17 (D) PROGRAMS DESCRIBED.—A program 

18 described in this subparagraph is a program 

19 (whether facility-based or freestanding) which is 

20 furnished by an entity— 

21 (i) legally authorized to furnish such a 

22 program under State law (or the State reg23 ulatory mechanism provided by State law) 

24 or certified to furnish such a program by 

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1 proved by the State in consultation with 

2 the Secretary; and 

3 (ii) meeting such other requirements 

4 as the Secretary may impose to ensure the 

5 quality of the intensive community-based 

6 services provided. 

7 (g) CARE COORDINATION SERVICES.— 

8 (1) IN GENERAL.—In this title, the term ‘‘care 

9 coordination services’’ means services provided by 

10 care coordinators (as defined in paragraph (2)) to 

11 individuals described in paragraph (3) for the co12 ordination and monitoring of home and community13 based long-term care services and services offered 

14 through medical homes to ensure appropriate, cost15 effective utilization of such services in a comprehen16 sive and continuous manner, and includes— 

17 (A) transition management between inpa18 tient facilities and community-based services, 

19 including assisting patients in identifying and 

20 gaining access to appropriate ancillary services; 

21 and 

22 (B) evaluating and recommending appro23 priate treatment services, in cooperation with 

24 patients and other providers and in conjunction 

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1 with any quality review program or plan of care 

2 under section 205. 

3 (2) CARE COORDINATOR.— 

4 (A) IN GENERAL.—In this title, the term 

5 ‘‘care coordinator’’ means an individual or non6 profit or public agency or organization which 

7 the State health security program determines— 

8 (i) is capable of performing directly, 

9 efficiently, and effectively the duties of a 

10 care coordinator described in paragraph 

11 (1); and 

12 (ii) demonstrates capability in estab13 lishing and periodically reviewing and re14 vising plans of care, and in arranging for 

15 and monitoring the provision and quality 

16 of services under any plan. 

17 (B) INDEPENDENCE.—State health secu18 rity programs shall establish safeguards to en19 sure that care coordinators have no financial in20 terest in treatment decisions or placements. 

21 Care coordination may not be provided through 

22 any structure or mechanism through which 

23 quality review is performed. 

24 (3) ELIGIBLE INDIVIDUALS.—An individual de25 scribed in this paragraph is an individual described 

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1 in section 203 (relating to individuals qualifying for 

2 long-term and chronic care services). 

3 (h) DENTAL SERVICES.— 

4 (1) IN GENERAL.—In this title, subject to sub5 section (b), the term ‘‘dental services’’ means the 

6 following: 

7 (A) Emergency dental treatment, including 

8 extractions, for bleeding, pain, acute infections, 

9 and injuries to the maxillofacial region. 

10 (B) Prevention and diagnosis of dental dis11 ease, including examinations of the hard and 

12 soft tissues of the oral cavity and related struc13 tures, radiographs, dental sealants, fluorides, 

14 and dental prophylaxis. 

15 (C) Treatment of dental disease, including 

16 non-cast fillings, periodontal maintenance serv17 ices, and endodontic services. 

18 (D) Space maintenance procedures to pre19 vent orthodontic complications. 

20 (E) Orthodontic treatment to prevent se21 vere malocclusions. 

22 (F) Full dentures. 

23 (G) Medically necessary oral health care. 

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1 (H) Any items and services for special 

2 needs patients that are not described in sub3 paragraphs (A) through (G) and that— 

4 (i) are required to provide such pa5 tients the items and services described in 

6 subparagraphs (A) through (G); 

7 (ii) are required to establish oral func8 tion (including general anesthesia for indi9 viduals with physical or emotional limita10 tions that prevent the provision of dental 

11 care without such anesthesia); 

12 (iii) consist of orthodontic care for se13 vere dentofacial abnormalities; or 

14 (iv) consist of prosthetic dental de15 vices for genetic or birth defects or fitting 

16 for such devices. 

17 (I) Any dental care for individuals with a 

18 seizure disorder that is not described in sub19 paragraphs (A) through (H) and that is re20 quired because of an illness, injury, disorder, or 

21 other health condition that results from such 

22 seizure disorder. 

23 (2) LIMITATIONS.—Dental services are subject 

24 to the following limitations: 

25 (A) PREVENTION AND DIAGNOSIS.— 

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1 (i) EXAMINATIONS AND PROPHY2 LAXIS.—The examinations and prophylaxis 

3 described in paragraph (1)(B) are covered 

4 only consistent with a periodicity schedule 

5 established by the Board, which schedule 

6 may provide for special treatment of indi7 viduals less than 18 years of age and of 

8 special needs patients. 

9 (ii) DENTAL SEALANTS.—The dental 

10 sealants described in such paragraph are 

11 not covered for individuals 18 years of age 

12 or older. Such sealants are covered for in13 dividuals less than 10 years of age for pro14 tection of the 1st permanent molars. Such 

15 sealants are covered for individuals 10 

16 years of age or older for protection of the 

17 2d permanent molars. 

18 (B) TREATMENT OF DENTAL DISEASE.— 

19 Prior to January 1, 2018, the items and serv20 ices described in paragraph (1)(C) are covered 

21 only for individuals less than 18 years of age 

22 and special needs patients. On or after such 

23 date, such items and services are covered for all 

24 individuals enrolled for benefits under this Act, 

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1 except that endodontic services are not covered 

2 for individuals 18 years of age or older. 

3 (C) SPACE MAINTENANCE.—The items and 

4 services described in paragraph (1)(D) are cov5 ered only for individuals at least 3 years of age, 

6 but less than 13 years of age and— 

7 (i) are limited to posterior teeth; 

8 (ii) involve maintenance of a space or 

9 spaces for permanent posterior teeth that 

10 would otherwise be prevented from normal 

11 eruption if the space were not maintained; 

12 and 

13 (iii) do not include a space maintainer 

14 that is placed within 6 months of the ex15 pected eruption of the permanent posterior 

16 tooth concerned. 

17 (3) DEFINITIONS.—For purposes of this title: 

18 (A) MEDICALLY NECESSARY ORAL HEALTH

19 CARE.—The term ‘‘medically necessary oral 

20 health care’’ means oral health care that is re21 quired as a direct result of, or would have a di22 rect impact on, an underlying medical condi23 tion. Such term includes oral health care di24 rected toward control or elimination of pain, in25 fection, or reestablishment of oral function. 

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1 (B) SPECIAL NEEDS PATIENT.—The term 

2 ‘‘special needs patient’’ includes an individual 

3 with a genetic or birth defect, a developmental 

4 disability, or an acquired medical disability. 

5 (i) NURSING FACILITY; NURSING FACILITY SERV6 ICES.—Except as may be provided by the Board, the 

7 terms ‘‘nursing facility’’ and ‘‘nursing facility services’’ 

8 have the meanings given such terms in sections 1919(a) 

9 and 1905(f), respectively, of the Social Security Act. 

10 (j) SERVICES IN INTERMEDIATE CARE FACILITIES

11 FOR INDIVIDUALS WITH AN INTELLECTUAL DIS12 ABILITY.—Except as may be provided by the Board— 

13 (1) the term ‘‘intermediate care facility for indi14 viduals with an intellectual disability’’ has the mean15 ing given the term ‘‘intermediate care facility for in16 dividuals with mental retardation’’ in section 

17 1905(d) of the Social Security Act (as in effect be18 fore the enactment of this Act); and 

19 (2) the term ‘‘services in intermediate care fa20 cilities for individuals with an intellectual disability’’ 

21 means services described in section 1905(a)(15) of 

22 such Act (as so in effect) in an intermediate care fa23 cility for individuals with an intellectual disability to 

24 an individual determined to require such services in 

25 accordance with standards specified by the Board 

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1 and comparable to the standards described in section 

2 1902(a)(31)(A) of such Act (as so in effect). 

3 (k) OTHER TERMS.—Except as may be provided by 

4 the Board, the definitions contained in section 1861 of the 

5 Social Security Act shall apply. 

6 SEC. 203. SPECIAL RULES FOR HOME AND COMMUNITY7 BASED LONG-TERM CARE SERVICES. 

8 (a) QUALIFYING INDIVIDUALS.—For purposes of sec9 tion 201(a)(5)(C), individuals described in this subsection 

10 are the following individuals: 

11 (1) ADULTS.—Individuals 18 years of age or 

12 older determined (in a manner specified by the 

13 Board)— 

14 (A) to be unable to perform, without the 

15 assistance of an individual, at least 2 of the fol16 lowing 5 activities of daily living (or who has a 

17 similar level of disability due to cognitive im18 pairment)— 

19 (i) bathing; 

20 (ii) eating; 

21 (iii) dressing; 

22 (iv) toileting; and 

23 (v) transferring in and out of a bed or 

24 in and out of a chair; 

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1 (B) due to cognitive or mental impair2 ments, to require supervision because the indi3 vidual behaves in a manner that poses health or 

4 safety hazards to himself or herself or others; 

5 or 

6 (C) due to cognitive or mental impair7 ments, to require queuing to perform activities 

8 of daily living. 

9 (2) CHILDREN.—Individuals under 18 years of 

10 age determined (in a manner specified by the Board) 

11 to meet such alternative standard of disability for 

12 children as the Board develops. Such alternative 

13 standard shall be comparable to the standard for 

14 adults and appropriate for children. 

15 (b) LIMIT ON SERVICES.— 

16 (1) IN GENERAL.—The aggregate expenditures 

17 by a State health security program with respect to 

18 home and community-based long-term care services 

19 in a period (specified by the Board) may not exceed 

20 65 percent (or such alternative ratio as the Board 

21 establishes under paragraph (2)) of the average of 

22 the amount of payment that would have been made 

23 under the program during the period if all the home24 based long-term care beneficiaries had been resimstockstill on DSKH9S0YB1PROD with BILLS

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1 dents of nursing facilities in the same area in which 

2 the services were provided. 

3 (2) ALTERNATIVE RATIO.—The Board may es4 tablish for purposes of paragraph (1) an alternative 

5 ratio (of payments for home and community-based 

6 long-term care services to payments for nursing fa7 cility services) as the Board determines to be more 

8 consistent with the goal of providing cost-effective 

9 long-term care in the most appropriate and least re10 strictive setting. 

11 SEC. 204. EXCLUSIONS AND LIMITATIONS. 

12 (a) IN GENERAL.—Subject to section 201(e), benefits 

13 for service are not available under this Act unless the serv14 ices meet the standards specified in section 201(a). 

15 (b) SPECIAL DELIVERY REQUIREMENTS FOR MEN16 TAL HEALTH AND SUBSTANCE ABUSE TREATMENT SERV17 ICES PROVIDED TO AT-RISK CHILDREN.— 

18 (1) REQUIRING SERVICES TO BE PROVIDED

19 THROUGH ORGANIZED SYSTEMS OF CARE.—A State 

20 health security program shall ensure that mental 

21 health services and substance abuse treatment serv22 ices are furnished through an organized system of 

23 care, as described in paragraph (2), if— 

24 (A) the services are provided to an indi25 vidual less than 22 years of age; 

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1 (B) the individual has a serious emotional 

2 disturbance or a substance abuse disorder; and 

3 (C) the individual is, or is at imminent risk 

4 of being, subject to the authority of, or in need 

5 of the services of, at least 1 public agency that 

6 serves the needs of children, including an agen7 cy involved with child welfare, special education, 

8 juvenile justice, or criminal justice. 

9 (2) REQUIREMENTS FOR SYSTEM OF CARE.—In 

10 this subsection, an ‘‘organized system of care’’ is a 

11 community-based service delivery network, which 

12 may consist of public and private providers, that 

13 meets the following requirements: 

14 (A) The system has established linkages 

15 with existing mental health services and sub16 stance abuse treatment service delivery pro17 grams in the plan service area (or is in the 

18 process of developing or operating a system 

19 with appropriate public agencies in the area to 

20 coordinate the delivery of such services to indi21 viduals in the area). 

22 (B) The system provides for the participa23 tion and coordination of multiple agencies and 

24 providers that serve the needs of children in the 

25 area, including agencies and providers involved 

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1 with child welfare, education, juvenile justice, 

2 criminal justice, health care, mental health, and 

3 substance abuse prevention and treatment. 

4 (C) The system provides for the involve5 ment of the families of children to whom mental 

6 health services and substance abuse treatment 

7 services are provided in the planning of treat8 ment and the delivery of services. 

9 (D) The system provides for the develop10 ment and implementation of individualized 

11 treatment plans by multidisciplinary and multi12 agency teams, which are recognized and fol13 lowed by the applicable agencies and providers 

14 in the area. 

15 (E) The system ensures the delivery and 

16 coordination of the range of mental health serv17 ices and substance abuse treatment services re18 quired by individuals under 22 years of age who 

19 have a serious emotional disturbance or a sub20 stance abuse disorder. 

21 (F) The system provides for the manage22 ment of the individualized treatment plans de23 scribed in subparagraph (D) and for a flexible 

24 response to changes in treatment needs over 

25 time. 

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1 (c) TREATMENT OF EXPERIMENTAL SERVICES.—In 

2 applying subsection (a), the Board shall make national 

3 coverage determinations with respect to those services that 

4 are experimental in nature. Such determinations shall be 

5 made consistent with a process that provides for input 

6 from representatives of health care professionals and pa7 tients and public comment. 

8 (d) APPLICATION OF PRACTICE GUIDELINES.—In 

9 the case of services for which the American Health Secu10 rity Quality Council (established under section 501) has 

11 recognized a national practice guideline, the services are 

12 considered to meet the standards specified in section 

13 201(a) if they have been provided in accordance with such 

14 guideline or in accordance with such guidelines as are pro15 vided by the State health security program consistent with 

16 title V. For purposes of this subsection, a service shall 

17 be considered to have been provided in accordance with 

18 a practice guideline if the health care provider providing 

19 the service exercised appropriate professional discretion to 

20 deviate from the guideline in a manner authorized or an21 ticipated by the guideline. 

22 (e) SPECIFIC LIMITATIONS.— 

23 (1) LIMITATIONS ON EYEGLASSES, CONTACT

24 LENSES, HEARING AIDS, AND DURABLE MEDICAL

25 EQUIPMENT.—Subject to section 201(e), the Board 

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1 may impose such limits relating to the costs and fre2 quency of replacement of eyeglasses, contact lenses, 

3 hearing aids, and durable medical equipment to 

4 which individuals enrolled for benefits under this Act 

5 are entitled to have payment made under a State 

6 health security program as the Board deems appro7 priate. 

8 (2) OVERLAP WITH PREVENTIVE SERVICES.— 

9 The coverage of services described in section 201(a) 

10 (other than paragraph (3)) which also are preventive 

11 services are required to be covered only to the extent 

12 that they are required to be covered as preventive 

13 services. 

14 (3) MISCELLANEOUS EXCLUSIONS FROM COV15 ERED SERVICES.—Covered services under this Act 

16 do not include the following: 

17 (A) Surgery and other procedures (such as 

18 orthodontia) performed solely for cosmetic pur19 poses (as defined in regulations) and hospital or 

20 other services incident thereto, unless— 

21 (i) required to correct a congenital 

22 anomaly; 

23 (ii) required to restore or correct a 

24 part of the body which has been altered as 

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1 a result of accidental injury, disease, or 

2 surgery; or 

3 (iii) otherwise determined to be medi4 cally necessary and appropriate under sec5 tion 201(a). 

6 (B) Personal comfort items or private 

7 rooms in inpatient facilities, unless determined 

8 to be medically necessary and appropriate 

9 under section 201(a). 

10 (C) The services of a professional practi11 tioner if they are furnished in a hospital or 

12 other facility which is not a participating pro13 vider. 

14 (f) NURSING FACILITY SERVICES AND HOME

15 HEALTH SERVICES.—Nursing facility services and home 

16 health services (other than post-hospital services, as de17 fined by the Board) furnished to an individual who is not 

18 described in section 203(a) are not covered services unless 

19 the services are determined to meet the standards speci20 fied in section 201(a) and, with respect to nursing facility 

21 services, to be provided in the least restrictive and most 

22 appropriate setting. 

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1 SEC. 205. CERTIFICATION; QUALITY REVIEW; PLANS OF 

2 CARE. 

3 (a) CERTIFICATIONS.—State health security pro4 grams may require, as a condition of payment for institu5 tional health care services and other services of the type 

6 described in such sections 1814(a) and 1835(a) of the So7 cial Security Act, periodic professional certifications of the 

8 kind described in such sections. 

9 (b) QUALITY REVIEW.—For the requirement that 

10 each State health security program establish a quality re11 view program that meets the requirements for such a pro12 gram under title V, see section 404(b)(1)(H). 

13 (c) PLAN OF CARE REQUIREMENTS.—A State health 

14 security program may require, consistent with standards 

15 established by the Board, that payment for services ex16 ceeding specified levels or duration be provided only as 

17 consistent with a plan of care or treatment formulated by 

18 one or more providers of the services or other qualified 

19 professionals. Such a plan may include, consistent with 

20 subsection (b), case management at specified intervals as 

21 a further condition of payment for services. 

22 TITLE III—PROVIDER 

23 PARTICIPATION 

24 SEC. 301. PROVIDER PARTICIPATION AND STANDARDS. 

25 (a) IN GENERAL.—An individual or other entity fur26 nishing any covered service under a State health security 

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1 program under this Act is not a qualified provider unless 

2 the individual or entity— 

3 (1) is a qualified provider of the services under 

4 section 302; 

5 (2) has filed with the State health security pro6 gram a participation agreement described in sub7 section (b); and 

8 (3) meets such other qualifications and condi9 tions as are established by the Board or the State 

10 health security program under this Act. 

11 (b) REQUIREMENTS IN PARTICIPATION AGREE12 MENT.— 

13 (1) IN GENERAL.—A participation agreement 

14 described in this subsection between a State health 

15 security program and a provider shall provide at 

16 least for the following: 

17 (A) Services to eligible persons will be fur18 nished by the provider without discrimination 

19 on the ground of race, national origin, income, 

20 religion, age, sex or sexual orientation, dis21 ability, handicapping condition, or (subject to 

22 the professional qualifications of the provider) 

23 illness. Nothing in this subparagraph shall be 

24 construed as requiring the provision of a type 

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1 or class of services which services are outside 

2 the scope of the provider’s normal practice. 

3 (B) No charge will be made for any cov4 ered services other than for payment authorized 

5 by this Act. 

6 (C) The provider agrees to furnish such in7 formation as may be reasonably required by the 

8 Board or a State health security program, in 

9 accordance with uniform reporting standards 

10 established under section 401(g)(1), for— 

11 (i) quality review by designated enti12 ties; 

13 (ii) the making of payments under 

14 this Act (including the examination of 

15 records as may be necessary for the 

16 verification of information on which pay17 ments are based); 

18 (iii) statistical or other studies re19 quired for the implementation of this Act; 

20 and 

21 (iv) such other purposes as the Board 

22 or State may specify. 

23 (D) The provider agrees not to bill the pro24 gram for any services for which benefits are not 

25 available because of section 204(d). 

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1 (E) In the case of a provider that is not 

2 an individual, the provider agrees not to employ 

3 or use for the provision of health services any 

4 individual or other provider who or which has 

5 had a participation agreement under this sub6 section terminated for cause. 

7 (F) In the case of a provider paid under a 

8 fee-for-service basis under section 612, the pro9 vider agrees to submit bills and any required 

10 supporting documentation relating to the provi11 sion of covered services within 30 days (or such 

12 shorter period as a State health security pro13 gram may require) after the date of providing 

14 such services. 

15 (2) TERMINATION OF PARTICIPATION AGREE16 MENTS.— 

17 (A) IN GENERAL.—Participation agree18 ments may be terminated, with appropriate no19 tice— 

20 (i) by the Board or a State health se21 curity program for failure to meet the re22 quirements of this title; or 

23 (ii) by a provider. 

24 (B) TERMINATION PROCESS.—Providers 

25 shall be provided notice and a reasonable oppormstockstill on DSKH9S0YB1PROD with BILLS

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1 tunity to correct deficiencies before the Board 

2 or a State health security program terminates 

3 an agreement unless a more immediate termi4 nation is required for public safety or similar 

5 reasons. 

6 SEC. 302. QUALIFICATIONS FOR PROVIDERS. 

7 (a) IN GENERAL.—A health care provider is consid8 ered to be qualified to provide covered services if the pro9 vider is licensed or certified and meets— 

10 (1) all the requirements of State law to provide 

11 such services; 

12 (2) applicable requirements of Federal law to 

13 provide such services; and 

14 (3) any applicable standards established under 

15 subsection (b). 

16 (b) MINIMUM PROVIDER STANDARDS.— 

17 (1) IN GENERAL.—The Board shall establish, 

18 evaluate, and update national minimum standards to 

19 ensure the quality of services provided under this 

20 Act and to monitor efforts by State health security 

21 programs to ensure the quality of such services. A 

22 State health security program may also establish ad23 ditional minimum standards which providers shall 

24 meet. 

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1 (2) NATIONAL MINIMUM STANDARDS.—The na2 tional minimum standards under paragraph (1) shall 

3 be established for institutional providers of services, 

4 individual health care practitioners, and comprehen5 sive health service organizations. Except as the 

6 Board may specify in order to carry out this title, 

7 a hospital, nursing facility, or other institutional 

8 provider of services shall meet standards for such a 

9 facility under the medicare program under title 

10 XVIII of the Social Security Act (42 U.S.C. 1395 et 

11 seq.). Such standards also may include, where ap12 propriate, elements relating to— 

13 (A) adequacy and quality of facilities; 

14 (B) training and competence of personnel 

15 (including continuing education requirements); 

16 (C) comprehensiveness of service; 

17 (D) continuity of service; 

18 (E) patient satisfaction (including waiting 

19 time and access to services); and 

20 (F) performance standards (including or21 ganization, facilities, structure of services, effi22 ciency of operation, and outcome in palliation, 

23 improvement of health, stabilization, cure, or 

24 rehabilitation). 

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1 (3) TRANSITION IN APPLICATION.—If the 

2 Board provides for additional requirements for pro3 viders under this subsection, any such additional re4 quirement shall be implemented in a manner that 

5 provides for a reasonable period during which a pre6 viously qualified provider is permitted to meet such 

7 an additional requirement. 

8 (4) EXCHANGE OF INFORMATION.—The Board 

9 shall provide for an exchange, at least annually, 

10 among State health security programs of informa11 tion with respect to quality assurance and cost con12 tainment. 

13 SEC. 303. QUALIFICATIONS FOR COMPREHENSIVE HEALTH 

14 SERVICE ORGANIZATIONS. 

15 (a) IN GENERAL.—For purposes of this Act, a com16 prehensive health service organization (in this section re17 ferred to as a ‘‘CHSO’’) is a public or private organization 

18 which, in return for a capitated payment amount, under19 takes to furnish, arrange for the provision of, or provide 

20 payment with respect to— 

21 (1) a full range of health services (as identified 

22 by the Board), including at least hospital services 

23 and physicians services; and 

24 (2) out-of-area coverage in the case of urgently 

25 needed services; 

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1 to an identified population which is living in or near a 

2 specified service area and which enrolls voluntarily in the 

3 organization. 

4 (b) ENROLLMENT.— 

5 (1) IN GENERAL.—All eligible persons living in 

6 or near the specified service area of a CHSO are eli7 gible to enroll in the organization; except that the 

8 number of enrollees may be limited to avoid over9 taxing the resources of the organization. 

10 (2) MINIMUM ENROLLMENT PERIOD.—Subject 

11 to paragraph (3), the minimum period of enrollment 

12 with a CHSO shall be 1 year, unless the enrolled in13 dividual becomes ineligible to enroll with the organi14 zation. 

15 (3) WITHDRAWAL FOR CAUSE.—Each CHSO 

16 shall permit an enrolled individual to disenroll from 

17 the organization for cause at any time. 

18 (c) REQUIREMENTS FOR CHSOS.— 

19 (1) ACCESSIBLE SERVICES.—Each CHSO shall 

20 make all health services readily and promptly acces21 sible to enrollees who live in the specified service 

22 area. 

23 (2) CONTINUITY OF CARE.—Each CHSO shall 

24 furnish services in such manner as to provide con25 tinuity of care and (when services are furnished by 

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1 different providers) shall provide ready referral of 

2 patients to such services and at such times as may 

3 be medically appropriate. 

4 (3) BOARD OF DIRECTORS.—In the case of a 

5 CHSO that is a private organization— 

6 (A) CONSUMER REPRESENTATION.—At 

7 least one-third of the members of the CHSO’s 

8 board of directors shall be consumer members 

9 with no direct or indirect, personal or family fi10 nancial relationship to the organization. 

11 (B) PROVIDER REPRESENTATION.—The 

12 CHSO’s board of directors shall include at least 

13 one member who represents health care pro14 viders. 

15 (4) PATIENT GRIEVANCE PROGRAM.—Each 

16 CHSO shall have in effect a patient grievance pro17 gram and shall conduct regularly surveys of the sat18 isfaction of members with services provided by or 

19 through the organization. 

20 (5) MEDICAL STANDARDS.—Each CHSO shall 

21 provide that a committee or committees of health 

22 care practitioners associated with the organization 

23 will promulgate medical standards, oversee the pro24 fessional aspects of the delivery of care, perform the 

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1 mittee, and monitor and review the quality of all 

2 health services (including drugs, education, and pre3 ventive services). 

4 (6) QUALITY AND OTHER REPORTING REQUIRE5 MENTS.— 

6 (A) IN GENERAL.—The Board shall deter7 mine appropriate measures to assess the quality 

8 of care furnished by the CHSO, such as meas9 ures of— 

10 (i) clinical processes and outcomes; 

11 (ii) patient and, where practicable, 

12 caregiver experience of care; and 

13 (iii) utilization (such as rates of hos14 pital admissions for ambulatory care sen15 sitive conditions). 

16 (B) OTHER DUTIES.—The CHSO shall— 

17 (i) define processes to promote evi18 dence-based medicine and patient engage19 ment, report on quality and cost measures, 

20 and coordinate care, such as through the 

21 use of telehealth, remote patient moni22 toring, and other such enabling tech23 nologies; and 

24 (ii) demonstrate to the Board that the 

25 CHSO meets patient-centeredness criteria 

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1 specified by the Board, such as the use of 

2 patient and caregiver assessments or the 

3 use of individualized care plans. 

4 (C) REPORTING REQUIREMENTS.—A 

5 CHSO shall submit data in a form and manner 

6 specified by the Board on measures the Board 

7 determines necessary for the CHSO to report to 

8 the State Health Security Program in order to 

9 evaluate the quality of care furnished by the 

10 CHSO. Such data may include care transitions 

11 across health care settings, including hospital 

12 discharge planning and post-hospital discharge 

13 follow-up by CHSO professionals, as the Board 

14 determines appropriate. 

15 (D) QUALITY PERFORMANCE STAND16 ARDS.—The Board shall establish quality per17 formance standards to assess the quality of care 

18 furnished by CHSOs and shall seek to improve 

19 the quality of care furnished by CHSOs over 

20 time by specifying higher standards, new meas21 ures, or both for purposes of assessing such 

22 quality of care. 

23 (7) PREMIUMS.—Premiums or other charges by 

24 a CHSO for any services not paid for under this Act 

25 shall be reasonable. 

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1 (8) UTILIZATION AND BONUS INFORMATION.— 

2 Each CHSO shall— 

3 (A) comply with the requirements of sec4 tion 1876(i)(8) of the Social Security Act (re5 lating to prohibiting physician incentive plans 

6 that provide specific inducements to reduce or 

7 limit medically necessary services); and 

8 (B) make available to its membership utili9 zation information and data regarding financial 

10 performance, including bonus or incentive pay11 ment arrangements to practitioners. 

12 (9) PROVISION OF SERVICES TO ENROLLEES AT

13 INSTITUTIONS OPERATING UNDER GLOBAL BUDG14 ETS.—The organization shall arrange to reimburse 

15 for hospital services and other facility-based services 

16 (as identified by the Board) for services provided to 

17 members of the organization in accordance with the 

18 global operating budget of the hospital or facility ap19 proved under section 611. 

20 (10) BROAD MARKETING.—Each CHSO shall 

21 provide for the marketing of its services (including 

22 dissemination of marketing materials) to potential 

23 enrollees in a manner that is designed to enroll indi24 viduals representative of the different population 

25 groups and geographic areas included within its 

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1 service area and meets such requirements as the 

2 Board or a State health security program may speci3 fy. 

4 (11) ADDITIONAL REQUIREMENTS.—Each 

5 CHSO shall meet— 

6 (A) such requirements relating to min7 imum enrollment; 

8 (B) such requirements relating to financial 

9 solvency; 

10 (C) such requirements relating to quality 

11 and availability of care; and 

12 (D) such other requirements, 

13 as the Board or a State health security program 

14 may specify. 

15 (d) PROVISION OF EMERGENCY SERVICES TO NON16 ENROLLEES.—A CHSO may furnish emergency services 

17 to persons who are not enrolled in the organization. Pay18 ment by the State Health Security Program for such serv19 ices, if they are covered services to eligible persons, shall 

20 be made to the organization unless the organization re21 quests that it be made to the individual provider who fur22 nished the services. 

23 SEC. 304. LIMITATION ON CERTAIN PHYSICIAN REFERRALS. 

24 (a) APPLICATION TO AMERICAN HEALTH SECURITY

25 PROGRAM.—Section 1877 of the Social Security Act, as 

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1 amended by subsections (b) and (c), shall apply under this 

2 Act in the same manner as it applies under title XVIII 

3 of the Social Security Act; except that in applying such 

4 section under this Act any references in such section to 

5 the Secretary or title XVIII of the Social Security Act are 

6 deemed references to the Board and the American Health 

7 Security Program under this Act, respectively. 

8 (b) EXPANSION OF PROHIBITION TO CERTAIN ADDI9 TIONAL DESIGNATED SERVICES.—Section 1877(h)(6) of 

10 the Social Security Act (42 U.S.C. 1395nn(h)(6)) is 

11 amended by adding at the end the following: 

12 ‘‘(M) Ambulance services. 

13 ‘‘(N) Home infusion therapy services.’’. 

14 (c) CONFORMING AMENDMENTS.—Section 1877 of 

15 such Act is further amended— 

16 (1) in subsection (a)(1)(A), by striking ‘‘for 

17 which payment otherwise may be made under this 

18 title’’ and inserting ‘‘for which a charge is imposed’’; 

19 (2) in subsection (a)(1)(B), by striking ‘‘under 

20 this title’’; 

21 (3) by amending paragraph (1) of subsection 

22 (g) to read as follows: 

23 ‘‘(1) DENIAL OF PAYMENT.—No payment may 

24 be made under a State health security program for 

25 a designated health service for which a claim is premstockstill on DSKH9S0YB1PROD with BILLS

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1 sented in violation of subsection (a)(1)(B). No indi2 vidual, third party payor, or other entity is liable for 

3 payment for designated health services for which a 

4 claim is presented in violation of such subsection.’’; 

5 and 

6 (4) in subsection (g)(3), by striking ‘‘for which 

7 payment may not be made under paragraph (1)’’ 

8 and inserting ‘‘for which such a claim may not be 

9 presented under subsection (a)(1)’’. 

10 TITLE IV—ADMINISTRATION 

11 Subtitle A—General Administrative 

12 Provisions 

13 SEC. 401. AMERICAN HEALTH SECURITY STANDARDS 

14 BOARD. 

15 (a) ESTABLISHMENT.—There is hereby established 

16 an American Health Security Standards Board. 

17 (b) APPOINTMENT AND TERMS OF MEMBERS.— 

18 (1) IN GENERAL.—The Board shall be com19 posed of— 

20 (A) the Secretary of Health and Human 

21 Services; and 

22 (B) 6 other individuals (described in para23 graph (2)) appointed by the President with the 

24 advice and consent of the Senate. 

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1 The President shall first nominate individuals under 

2 subparagraph (B) on a timely basis so as to provide 

3 for the operation of the Board by not later than 

4 January 1, 2012. 

5 (2) SELECTION OF APPOINTED MEMBERS.— 

6 With respect to the individuals appointed under 

7 paragraph (1)(B): 

8 (A) The members shall be chosen on the 

9 basis of backgrounds in health policy, health ec10 onomics, the health professions, and the admin11 istration of health care institutions. 

12 (B) The members shall provide a balanced 

13 point of view with respect to the various health 

14 care interests and at least 2 of them shall rep15 resent the interests of individual consumers. 

16 (C) At least 1 member shall have a nurs17 ing background. 

18 (D) Not more than 3 members shall be 

19 from the same political party. 

20 (E) To the greatest extent feasible, the 

21 members shall represent the various geographic 

22 regions of the United States and shall reflect 

23 the racial, ethnic, and gender composition of 

24 the population of the United States. 

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1 (3) TERMS OF APPOINTED MEMBERS.—Individ2 uals appointed under paragraph (1)(B) shall serve 

3 for a term of 6 years, except that the terms of 5 of 

4 the individuals initially appointed shall be, as des5 ignated by the President at the time of their ap6 pointment, for 1, 2, 3, 4, and 5 years. During a 

7 term of membership on the Board, no member shall 

8 engage in any other business, vocation or employ9 ment. 

10 (c) VACANCIES.— 

11 (1) IN GENERAL.—The President shall fill any 

12 vacancy in the membership of the Board in the same 

13 manner as the original appointment. The vacancy 

14 shall not affect the power of the remaining members 

15 to execute the duties of the Board. 

16 (2) VACANCY APPOINTMENTS.—Any member 

17 appointed to fill a vacancy shall serve for the re18 mainder of the term for which the predecessor of the 

19 member was appointed. 

20 (3) REAPPOINTMENT.—The President may re21 appoint an appointed member of the Board for a 

22 second term in the same manner as the original ap23 pointment. A member who has served for 2 consecu24 tive 6-year terms shall not be eligible for reappointmstockstill on DSKH9S0YB1PROD with BILLS

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1 ment until 2 years after the member has ceased to 

2 serve. 

3 (4) REMOVAL FOR CAUSE.—Upon confirmation, 

4 members of the Board may not be removed except 

5 by the President for cause. 

6 (d) CHAIR.—The President shall designate 1 of the 

7 members of the Board, other than the Secretary, to serve 

8 at the will of the President as Chair of the Board. 

9 (e) COMPENSATION.—Members of the Board (other 

10 than the Secretary) shall be entitled to compensation at 

11 a level equivalent to level II of the Executive Schedule, 

12 in accordance with section 5313 of title 5, United States 

13 Code. 

14 (f) GENERAL DUTIES OF THE BOARD.— 

15 (1) IN GENERAL.—The Board shall develop 

16 policies, procedures, guidelines, and requirements to 

17 carry out this Act, including those related to— 

18 (A) eligibility; 

19 (B) enrollment; 

20 (C) benefits; 

21 (D) provider participation standards and 

22 qualifications, as defined in title III; 

23 (E) CHSOs; 

24 (F) national and State funding levels; 

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1 (G) methods for determining amounts of 

2 payments to providers of covered services, con3 sistent with subtitle B of title VI; 

4 (H) the determination of medical necessity 

5 and appropriateness with respect to coverage of 

6 certain services; 

7 (I) assisting State health security pro8 grams with planning for capital expenditures 

9 and service delivery; 

10 (J) planning for health professional edu11 cation funding (as specified in title VI); 

12 (K) allocating funds provided under title 

13 VII; and 

14 (L) encouraging States to develop regional 

15 planning mechanisms (described in section 

16 404(a)(3)). 

17 (2) REGULATIONS.—Regulations authorized by 

18 this Act shall be issued by the Board in accordance 

19 with the provisions of section 553 of title 5, United 

20 States Code. 

21 (g) UNIFORM REPORTING STANDARDS; ANNUAL RE22 PORT; STUDIES.— 

23 (1) UNIFORM REPORTING STANDARDS.— 

24 (A) IN GENERAL.—The Board shall estab25 lish uniform State reporting requirements and 

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1 national standards to ensure an adequate na2 tional data base regarding health services prac3 titioners, services and finances of State health 

4 security programs, approved plans, providers, 

5 and the costs of facilities and practitioners pro6 viding services. Such standards shall include, to 

7 the maximum extent feasible, health outcome 

8 measures. 

9 (B) REPORTS.—The Board shall analyze 

10 regularly information reported to it, and to 

11 State health security programs pursuant to 

12 such requirements and standards. 

13 (2) ANNUAL REPORT.—Beginning January 1, 

14 of the second year beginning after the date of the 

15 enactment of this Act, the Board shall annually re16 port to Congress on the following: 

17 (A) The status of implementation of the 

18 Act. 

19 (B) Enrollment under this Act. 

20 (C) Benefits under this Act. 

21 (D) Expenditures and financing under this 

22 Act. 

23 (E) Cost-containment measures and 

24 achievements under this Act. 

25 (F) Quality assurance. 

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1 (G) Health care utilization patterns, in2 cluding any changes attributable to the pro3 gram. 

4 (H) Long-range plans and goals for the de5 livery of health services. 

6 (I) Differences in the health status of the 

7 populations of the different States, including in8 come and racial characteristics. 

9 (J) Necessary changes in the education of 

10 health personnel. 

11 (K) Plans for improving service to medi12 cally underserved populations. 

13 (L) Transition problems as a result of im14 plementation of this Act. 

15 (M) Opportunities for improvements under 

16 this Act. 

17 (3) STATISTICAL ANALYSES AND OTHER STUD18 IES.—The Board may, either directly or by con19 tract— 

20 (A) make statistical and other studies, on 

21 a nationwide, regional, State, or local basis, of 

22 any aspect of the operation of this Act, includ23 ing studies of the effect of the Act upon the 

24 health of the people of the United States and 

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1 the effect of comprehensive health services upon 

2 the health of persons receiving such services; 

3 (B) develop and test methods of providing 

4 through payment for services or otherwise, ad5 ditional incentives for adherence by providers to 

6 standards of adequacy, access, and quality; 

7 methods of consumer and peer review and peer 

8 control of the utilization of drugs, of laboratory 

9 services, and of other services; and methods of 

10 consumer and peer review of the quality of serv11 ices; 

12 (C) develop and test, for use by the Board, 

13 records and information retrieval systems and 

14 budget systems for health services administra15 tion, and develop and test model systems for 

16 use by providers of services; 

17 (D) develop and test, for use by providers 

18 of services, records and information retrieval 

19 systems useful in the furnishing of preventive 

20 or diagnostic services; 

21 (E) develop, in collaboration with the phar22 maceutical profession, and test, improved ad23 ministrative practices or improved methods for 

24 the reimbursement of independent pharmacies 

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1 for the cost of furnishing drugs as a covered 

2 service; and 

3 (F) conduct or solicit other studies as it 

4 may consider necessary or promising for the 

5 evaluation, or for the improvement, of the oper6 ation of this Act. 

7 (4) REPORT ON USE OF EXISTING FEDERAL

8 HEALTH CARE FACILITIES.—Not later than 1 year 

9 after the date of the enactment of this Act, the 

10 Board shall recommend to Congress one or more 

11 proposals for the treatment of health care facilities 

12 of the Federal Government. 

13 (h) EXECUTIVE DIRECTOR.— 

14 (1) APPOINTMENT.—There is hereby estab15 lished the position of Executive Director of the 

16 Board. The Director shall be appointed by the 

17 Board and shall serve as secretary to the Board and 

18 perform such duties in the administration of this 

19 title as the Board may assign. 

20 (2) DELEGATION.—The Board is authorized to 

21 delegate to the Director or to any other officer or 

22 employee of the Board or, with the approval of the 

23 Secretary of Health and Human Services (and sub24 ject to reimbursement of identifiable costs), to any 

25 other officer or employee of the Department of 

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1 Health and Human Services, any of its functions or 

2 duties under this Act other than— 

3 (A) the issuance of regulations; or 

4 (B) the determination of the availability of 

5 funds and their allocation to implement this 

6 Act. 

7 (3) COMPENSATION.—The Executive Director 

8 of the Board shall be entitled to compensation at a 

9 level equivalent to level III of the Executive Sched10 ule, in accordance with section 5314 of title 5, 

11 United States Code. 

12 (i) INSPECTOR GENERAL.—The Inspector General 

13 Act of 1978 (5 U.S.C. App.) is amended— 

14 (1) in section 12(1), by inserting after ‘‘Cor15 poration;’’ the first place it appears the following: 

16 ‘‘the Chair of the American Health Security Stand17 ards Board;’’; 

18 (2) in section 12(2), by inserting after ‘‘Resolu19 tion Trust Corporation,’’ the following: ‘‘the Amer20 ican Health Security Standards Board,’’; and 

21 (3) by inserting before section 9 the following: 

22 ‘‘SPECIAL PROVISIONS CONCERNING AMERICAN HEALTH

23 SECURITY STANDARDS BOARD

24 ‘‘SEC. 8M. The Inspector General of the American 

25 Health Security Standards Board, in addition to the other 

26 authorities vested by this Act, shall have the same authormstockstill on DSKH9S0YB1PROD with BILLS

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1 ity, with respect to the Board and the American Health 

2 Security Program under this Act, as the Inspector General 

3 for the Department of Health and Human Services has 

4 with respect to the Secretary of Health and Human Serv5 ices and the medicare and medicaid programs, respec6 tively.’’. 

7 (j) STAFF.—The Board shall employ such staff as the 

8 Board may deem necessary. 

9 (k) ACCESS TO INFORMATION.—The Secretary of 

10 Health and Human Services shall make available to the 

11 Board all information available from sources within the 

12 Department or from other sources, pertaining to the du13 ties of the Board. 

14 SEC. 402. AMERICAN HEALTH SECURITY ADVISORY COUN15 CIL. 

16 (a) IN GENERAL.—The Board shall provide for an 

17 American Health Security Advisory Council (in this sec18 tion referred to as the ‘‘Council’’) to advise the Board on 

19 its activities. 

20 (b) MEMBERSHIP.—The Council shall be composed 

21 of— 

22 (1) the Chair of the Board, who shall serve as 

23 Chair of the Council; and 

24 (2) 20 members, not otherwise in the employ of 

25 the United States, appointed by the Board without 

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1 regard to the provisions of title 5, United States 

2 Code, governing appointments in the competitive 

3 service. 

4 The appointed members shall include, in accordance with 

5 subsection (e), individuals who are representative of State 

6 health security programs, public health professionals, pro7 viders of health services, and of individuals (who shall con8 stitute a majority of the Council) who are representative 

9 of consumers of such services, including a balanced rep10 resentation of employers, unions, consumer organizations, 

11 and population groups with special health care needs. To 

12 the greatest extent feasible, the membership of the Council 

13 shall represent the various geographic regions of the 

14 United States and shall reflect the racial, ethnic, and gen15 der composition of the population of the United States. 

16 (c) TERMS OF MEMBERS.—Each appointed member 

17 shall hold office for a term of 4 years, except that— 

18 (1) any member appointed to fill a vacancy oc19 curring during the term for which the member’s 

20 predecessor was appointed shall be appointed for the 

21 remainder of that term; and 

22 (2) the terms of the members first taking office 

23 shall expire, as designated by the Board at the time 

24 of appointment, at the end of the first year with re25 spect to 5 members, at the end of the second year 

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1 with respect to 5 members, at the end of the third 

2 year with respect to 5 members, and at the end of 

3 the fourth year with respect to 5 members after the 

4 date of enactment of this Act. 

5 (d) VACANCIES.— 

6 (1) IN GENERAL.—The Board shall fill any va7 cancy in the membership of the Council in the same 

8 manner as the original appointment. The vacancy 

9 shall not affect the power of the remaining members 

10 to execute the duties of the Council. 

11 (2) VACANCY APPOINTMENTS.—Any member 

12 appointed to fill a vacancy shall serve for the re13 mainder of the term for which the predecessor of the 

14 member was appointed. 

15 (3) REAPPOINTMENT.—The Board may re16 appoint an appointed member of the Council for a 

17 second term in the same manner as the original ap18 pointment. 

19 (e) QUALIFICATIONS.— 

20 (1) PUBLIC HEALTH REPRESENTATIVES.— 

21 Members of the Council who are representative of 

22 State health security programs and public health 

23 professionals shall be individuals who have extensive 

24 experience in the financing and delivery of care 

25 under public health programs. 

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1 (2) PROVIDERS.—Members of the Council who 

2 are representative of providers of health care shall 

3 be individuals who are outstanding in fields related 

4 to medical, hospital, or other health activities, or 

5 who are representative of organizations or associa6 tions of professional health practitioners. 

7 (3) CONSUMERS.—Members who are represent8 ative of consumers of such care shall be individuals, 

9 not engaged in and having no financial interest in 

10 the furnishing of health services, who are familiar 

11 with the needs of various segments of the population 

12 for personal health services and are experienced in 

13 dealing with problems associated with the consump14 tion of such services. 

15 (f) DUTIES.— 

16 (1) IN GENERAL.—It shall be the duty of the 

17 Council— 

18 (A) to advise the Board on matters of gen19 eral policy in the administration of this Act, in 

20 the formulation of regulations, and in the per21 formance of the Board’s duties under section 

22 401; and 

23 (B) to study the operation of this Act and 

24 the utilization of health services under it, with 

25 a view to recommending any changes in the admstockstill on DSKH9S0YB1PROD with BILLS

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1 ministration of the Act or in its provisions 

2 which may appear desirable. 

3 (2) REPORT.—The Council shall make an an4 nual report to the Board on the performance of its 

5 functions, including any recommendations it may 

6 have with respect thereto, and the Board shall 

7 promptly transmit the report to the Congress, to8 gether with a report by the Board on any rec9 ommendations of the Council that have not been fol10 lowed. 

11 (g) STAFF.—The Council, its members, and any com12 mittees of the Council shall be provided with such secre13 tarial, clerical, or other assistance as may be authorized 

14 by the Board for carrying out their respective functions. 

15 (h) MEETINGS.—The Council shall meet as fre16 quently as the Board deems necessary, but not less than 

17 4 times each year. Upon request by 7 or more members 

18 it shall be the duty of the Chair to call a meeting of the 

19 Council. 

20 (i) COMPENSATION.—Members of the Council shall 

21 be reimbursed by the Board for travel and per diem in 

22 lieu of subsistence expenses during the performance of du23 ties of the Board in accordance with subchapter I of chap24 ter 57 of title 5, United States Code. 

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1 (j) FACA NOT APPLICABLE.—The provisions of the 

2 Federal Advisory Committee Act shall not apply to the 

3 Council. 

4 SEC. 403. CONSULTATION. 

5 The Secretary and the Board shall consult with Fed6 eral agencies and private entities, such as professional so7 cieties, national associations, nationally recognized asso8 ciations of experts, medical schools and academic health 

9 centers, consumer groups, and labor and business organi10 zations in the formulation of guidelines, regulations, policy 

11 initiatives, and information gathering to ensure the broad12 est and most informed input in the administration of this 

13 Act. Nothing in this Act shall prevent the Secretary from 

14 adopting guidelines developed by such a private entity if, 

15 in the Secretary’s and Board’s judgment, such guidelines 

16 are generally accepted as reasonable and prudent and con17 sistent with this Act. 

18 SEC. 404. STATE HEALTH SECURITY PROGRAMS. 

19 (a) SUBMISSION OF PLANS.— 

20 (1) IN GENERAL.—Each State shall submit to 

21 the Board a plan for a State health security pro22 gram for providing for health care services to the 

23 residents of the State in accordance with this Act. 

24 (2) REGIONAL PROGRAMS.—A State may join 

25 with 1 or more neighboring States to submit to the 

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1 Board a plan for a regional health security program 

2 instead of separate State health security programs. 

3 (3) REGIONAL PLANNING MECHANISMS.—The 

4 Board shall provide incentives for States to develop 

5 regional planning mechanisms to promote the ration6 al distribution of, adequate access to, and efficient 

7 use of, tertiary care facilities, equipment, and serv8 ices. 

9 (4) STATES THAT FAIL TO SUBMIT A PLAN.— 

10 In the case of a State that fails to submit a plan as 

11 required under this subsection, the American Health 

12 Security Standards Board Authority shall develop a 

13 plan for a State health security program in such 

14 State. 

15 (b) REVIEW AND APPROVAL OF PLANS.— 

16 (1) IN GENERAL.—The Board shall review 

17 plans submitted under subsection (a) and determine 

18 whether such plans meet the requirements for ap19 proval. The Board shall not approve such a plan un20 less it finds that the plan (or State law) provides, 

21 consistent with the provisions of this Act, for the fol22 lowing: 

23 (A) Payment for required health services 

24 for eligible individuals in the State in accord25 ance with this Act. 

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1 (B) Adequate administration, including the 

2 designation of a single State agency responsible 

3 for the administration (or supervision of the ad4 ministration) of the program. 

5 (C) The establishment of a State health se6 curity budget. 

7 (D) Establishment of payment methodolo8 gies (consistent with subtitle B of title VII). 

9 (E) Assurances that individuals have the 

10 freedom to choose practitioners and other 

11 health care providers for services covered under 

12 this Act. 

13 (F) A procedure for carrying out long-term 

14 regional management and planning functions 

15 with respect to the delivery and distribution of 

16 health care services that— 

17 (i) ensures participation of consumers 

18 of health services and providers of health 

19 services; and 

20 (ii) gives priority to the most acute 

21 shortages and maldistributions of health 

22 personnel and facilities and the most seri23 ous deficiencies in the delivery of covered 

24 services and to the means for the speedy 

25 alleviation of these shortcomings. 

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1 (G) The licensure and regulation of all 

2 health providers and facilities to ensure compli3 ance with Federal and State laws and to pro4 mote quality of care. 

5 (H) Establishment of a quality review sys6 tem in accordance with section 503. 

7 (I) Establishment of an independent om8 budsman for consumers to register complaints 

9 about the organization and administration of 

10 the State health security program and to help 

11 resolve complaints and disputes between con12 sumers and providers. 

13 (J) Publication of an annual report on the 

14 operation of the State health security program, 

15 which report shall include information on cost, 

16 progress towards achieving full enrollment, pub17 lic access to health services, quality review, 

18 health outcomes, health professional training, 

19 the needs of medically underserved populations, 

20 and the information required in the annual re21 port under section 401(g)(2). 

22 (K) Provision of a fraud and abuse preven23 tion and control unit that the Inspector General 

24 determines meets the requirements of section 

25 412(a). 

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1 (L) Prohibit payment in cases of prohib2 ited physician referrals under section 304. 

3 (2) CONSEQUENCES OF FAILURE TO COMPLY.— 

4 If the Board finds that a State plan submitted 

5 under paragraph (1) does not meet the requirements 

6 for approval under this section or that a State 

7 health security program or specific portion of such 

8 program, the plan for which was previously ap9 proved, no longer meets such requirements, the 

10 Board shall provide notice to the State of such fail11 ure and that unless corrective action is taken within 

12 a period specified by the Board, the Board shall 

13 place the State health security program (or specific 

14 portions of such program) in receivership under the 

15 jurisdiction of the Board. 

16 (c) STATE HEALTH SECURITY ADVISORY COUN17 CILS.— 

18 (1) IN GENERAL.—For each State, the Gov19 ernor shall provide for appointment of a State 

20 Health Security Advisory Council to advise and 

21 make recommendations to the Governor and State 

22 with respect to the implementation of the State 

23 health security program in the State. 

24 (2) MEMBERSHIP.—Each State Health Security 

25 Advisory Council shall be composed of at least 11 inmstockstill on DSKH9S0YB1PROD with BILLS

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1 dividuals. The appointed members shall include indi2 viduals who are representative of the State health 

3 security program, public health professionals, pro4 viders of health services, and of individuals (who 

5 shall constitute a majority) who are representative of 

6 consumers of such services, including a balanced 

7 representation of employers, unions and consumer 

8 organizations. To the greatest extent feasible, the 

9 membership of each State Health Security Advisory 

10 Council shall represent the various geographic re11 gions of the State and shall reflect the racial, ethnic, 

12 and gender composition of the population of the 

13 State. 

14 (3) DUTIES.— 

15 (A) IN GENERAL.—Each State Health Se16 curity Advisory Council shall review, and sub17 mit comments to the Governor concerning the 

18 implementation of the State health security pro19 gram in the State. 

20 (B) ASSISTANCE.—Each State Health Se21 curity Advisory Council shall provide assistance 

22 and technical support to community organiza23 tions and public and private non-profit agencies 

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1 grams, with particular emphasis placed on as2 sisting those applicants with broad consumer 

3 representation. 

4 (d) STATE USE OF FISCAL AGENTS.— 

5 (1) IN GENERAL.—Each State health security 

6 program, using competitive bidding procedures, may 

7 enter into such contracts with qualified entities, as 

8 the State determines to be appropriate to process 

9 claims and to perform other related functions of fis10 cal agents under the State health security program. 

11 (2) RESTRICTION.—Except as the Board may 

12 provide for good cause shown, in no case may more 

13 than 1 contract described in paragraph (1) be en14 tered into under a State health security program. 

15 SEC. 405. COMPLEMENTARY CONDUCT OF RELATED 

16 HEALTH PROGRAMS. 

17 In performing functions with respect to health per18 sonnel education and training, health research, environ19 mental health, disability insurance, vocational rehabilita20 tion, the regulation of food and drugs, and all other mat21 ters pertaining to health, the Secretary of Health and 

22 Human Services shall direct all activities of the Depart23 ment of Health and Human Services toward contributions 

24 to the health of the people complementary to this Act. 

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1 Subtitle B—Control Over Fraud 

2 and Abuse 

3 SEC. 411. APPLICATION OF FEDERAL SANCTIONS TO ALL 

4 FRAUD AND ABUSE UNDER AMERICAN 

5 HEALTH SECURITY PROGRAM. 

6 The following sections of the Social Security Act shall 

7 apply to State health security programs in the same man8 ner as they apply to State medical assistance plans under 

9 title XIX of such Act (except that in applying such provi10 sions any reference to the Secretary is deemed a reference 

11 to the Board): 

12 (1) Section 1128 (relating to exclusion of indi13 viduals and entities). 

14 (2) Section 1128A (civil monetary penalties). 

15 (3) Section 1128B (criminal penalties). 

16 (4) Section 1124 (relating to disclosure of own17 ership and related information). 

18 (5) Section 1126 (relating to disclosure of cer19 tain owners). 

20 SEC. 412. REQUIREMENTS FOR OPERATION OF STATE 

21 HEALTH CARE FRAUD AND ABUSE CONTROL 

22 UNITS. 

23 (a) REQUIREMENT.—In order to meet the require24 ment of section 404(b)(1)(K), each State health security 

25 program shall establish and maintain a health care fraud 

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1 and abuse control unit (in this section referred to as a 

2 ‘‘fraud unit’’) that meets requirements of this section and 

3 other requirements of the Board. Such a unit may be a 

4 State medicaid fraud control unit (described in section 

5 1903(q) of the Social Security Act). 

6 (b) STRUCTURE OF UNIT.—The fraud unit shall— 

7 (1) be a single identifiable entity of the State 

8 government; 

9 (2) be separate and distinct from the State 

10 agency with principal responsibility for the adminis11 tration of the State health security program; and 

12 (3) meet 1 of the following requirements: 

13 (A) It shall be a unit of the office of the 

14 State Attorney General or of another depart15 ment of State government which possesses 

16 statewide authority to prosecute individuals for 

17 criminal violations. 

18 (B) If it is in a State the constitution of 

19 which does not provide for the criminal prosecu20 tion of individuals by a statewide authority and 

21 has formal procedures, approved by the Board, 

22 that— 

23 (i) assure its referral of suspected 

24 criminal violations relating to the State 

25 health insurance plan to the appropriate 

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1 authority or authorities in the States for 

2 prosecution; and 

3 (ii) assure its assistance of, and co4 ordination with, such authority or authori5 ties in such prosecutions. 

6 (C) It shall have a formal working relation7 ship with the office of the State Attorney Gen8 eral and have formal procedures (including pro9 cedures for its referral of suspected criminal 

10 violations to such office) which are approved by 

11 the Board and which provide effective coordina12 tion of activities between the fraud unit and 

13 such office with respect to the detection, inves14 tigation, and prosecution of suspected criminal 

15 violations relating to the State health insurance 

16 plan. 

17 (c) FUNCTIONS.—The fraud unit shall— 

18 (1) have the function of conducting a statewide 

19 program for the investigation and prosecution of vio20 lations of all applicable State laws regarding any 

21 and all aspects of fraud in connection with any as22 pect of the provision of health care services and ac23 tivities of providers of such services under the State 

24 health security program; 

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1 (2) have procedures for reviewing complaints of 

2 the abuse and neglect of patients of providers and 

3 facilities that receive payments under the State 

4 health security program, and, where appropriate, for 

5 acting upon such complaints under the criminal laws 

6 of the State or for referring them to other State 

7 agencies for action; and 

8 (3) provide for the collection, or referral for col9 lection to a single State agency, of overpayments 

10 that are made under the State health security pro11 gram to providers and that are discovered by the 

12 fraud unit in carrying out its activities. 

13 (d) RESOURCES.—The fraud unit shall— 

14 (1) employ such auditors, attorneys, investiga15 tors, and other necessary personnel; 

16 (2) be organized in such a manner; and 

17 (3) provide sufficient resources (as specified by 

18 the Board), 

19 as is necessary to promote the effective and efficient con20 duct of the unit’s activities. 

21 (e) COOPERATIVE AGREEMENTS.—The fraud unit 

22 shall have cooperative agreements (as specified by the 

23 Board) with— 

24 (1) similar fraud units in other States; 

25 (2) the Inspector General; and 

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1 (3) the Attorney General of the United States. 

2 (f) REPORTS.—The fraud unit shall submit to the In3 spector General an application and annual reports con4 taining such information as the Inspector General deter5 mines to be necessary to determine whether the unit meets 

6 the previous requirements of this section. 

7 TITLE V—QUALITY ASSESSMENT 

8 SEC. 501. AMERICAN HEALTH SECURITY QUALITY COUNCIL. 

9 (a) ESTABLISHMENT.—There is hereby established 

10 an American Health Security Quality Council (in this title 

11 referred to as the ‘‘Council’’). 

12 (b) DUTIES OF THE COUNCIL.—The Council shall 

13 perform the following duties: 

14 (1) PRACTICE GUIDELINES.—The Council shall 

15 review and evaluate each practice guideline devel16 oped under part B of title IX of the Public Health 

17 Service Act. The Council shall determine whether 

18 the guideline should be recognized as a national 

19 practice guideline to be used under section 204(d) 

20 for purposes of determining payments under a State 

21 health security program. 

22 (2) STANDARDS OF QUALITY, PERFORMANCE

23 MEASURES, AND MEDICAL REVIEW CRITERIA.—The 

24 Council shall review and evaluate each standard of 

25 quality, performance measure, and medical review 

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1 criterion developed under part B of title IX of the 

2 Public Health Service Act. The Council shall deter3 mine whether the standard, measure, or criterion is 

4 appropriate for use in assessing or reviewing the 

5 quality of services provided by State health security 

6 programs, health care institutions, or health care 

7 professionals. 

8 (3) CRITERIA FOR ENTITIES CONDUCTING

9 QUALITY REVIEWS.—The Council shall develop min10 imum criteria for competence for entities that can 

11 qualify to conduct ongoing and continuous external 

12 quality review for State quality review programs 

13 under section 503. Such criteria shall require such 

14 an entity to be administratively independent of the 

15 individual or board that administers the State health 

16 security program and shall ensure that such entities 

17 do not provide financial incentives to reviewers to 

18 favor one pattern of practice over another. The 

19 Council shall ensure coordination and reporting by 

20 such entities to ensure national consistency in qual21 ity standards. 

22 (4) REPORTING.—The Council shall report to 

23 the Board annually on the conduct of activities 

24 under such title and shall report to the Board annu25 ally specifically on findings from outcomes research 

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1 and development of practice guidelines that may af2 fect the Board’s determination of coverage of serv3 ices under section 401(f)(1)(G). 

4 (5) OTHER FUNCTIONS.—The Council shall 

5 perform the functions of the Council described in 

6 section 502. 

7 (c) APPOINTMENT AND TERMS OF MEMBERS.— 

8 (1) IN GENERAL.—The Council shall be com9 posed of 10 members appointed by the President. 

10 The President shall first appoint individuals on a 

11 timely basis so as to provide for the operation of the 

12 Council by not later than January 1, 2012. 

13 (2) SELECTION OF MEMBERS.—Each member 

14 of the Council shall be a member of a health profes15 sion. Five members of the Council shall be physi16 cians. Individuals shall be appointed to the Council 

17 on the basis of national reputations for clinical and 

18 academic excellence. To the greatest extent feasible, 

19 the membership of the Council shall represent the 

20 various geographic regions of the United States and 

21 shall reflect the racial, ethnic, and gender composi22 tion of the population of the United States. 

23 (3) TERMS OF MEMBERS.—Individuals ap24 pointed to the Council shall serve for a term of 5 

25 years, except that the terms of 4 of the individuals 

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1 initially appointed shall be, as designated by the 

2 President at the time of their appointment, for 1, 2, 

3 3, and 4 years. 

4 (d) VACANCIES.— 

5 (1) IN GENERAL.—The President shall fill any 

6 vacancy in the membership of the Council in the 

7 same manner as the original appointment. The va8 cancy shall not affect the power of the remaining 

9 members to execute the duties of the Council. 

10 (2) VACANCY APPOINTMENTS.—Any member 

11 appointed to fill a vacancy shall serve for the re12 mainder of the term for which the predecessor of the 

13 member was appointed. 

14 (3) REAPPOINTMENT.—The President may re15 appoint a member of the Council for a second term 

16 in the same manner as the original appointment. A 

17 member who has served for 2 consecutive 5-year 

18 terms shall not be eligible for reappointment until 2 

19 years after the member has ceased to serve. 

20 (e) CHAIR.—The President shall designate 1 of the 

21 members of the Council to serve at the will of the Presi22 dent as Chair of the Council. 

23 (f) COMPENSATION.—Members of the Council who 

24 are not employees of the Federal Government shall be en25 titled to compensation at a level equivalent to level II of 

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1 the Executive Schedule, in accordance with section 5313 

2 of title 5, United States Code. 

3 SEC. 502. DEVELOPMENT OF CERTAIN METHODOLOGIES, 

4 GUIDELINES, AND STANDARDS. 

5 (a) PROFILING OF PATTERNS OF PRACTICE; IDENTI6 FICATION OF OUTLIERS.—The Council shall adopt meth7 odologies for profiling the patterns of practice of health 

8 care professionals and for identifying outliers (as defined 

9 in subsection (e)). 

10 (b) CENTERS OF EXCELLENCE.—The Council shall 

11 develop guidelines for certain medical procedures des12 ignated by the Board to be performed only at tertiary care 

13 centers which can meet standards for frequency of proce14 dure performance and intensity of support mechanisms 

15 that are consistent with the high probability of desired pa16 tient outcome. Reimbursement under this Act for such a 

17 designated procedure may only be provided if the proce18 dure was performed at a center that meets such stand19 ards. 

20 (c) REMEDIAL ACTIONS.—The Council shall develop 

21 standards for education and sanctions with respect to 

22 outliers so as to ensure the quality of health care services 

23 provided under this Act. The Council shall develop criteria 

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1 cation proves ineffective in correcting provider practice be2 havior. 

3 (d) DISSEMINATION.—The Council shall disseminate 

4 to the State— 

5 (1) the methodologies adopted under subsection 

6 (a); 

7 (2) the guidelines developed under subsection 

8 (b); and 

9 (3) the standards developed under subsection 

10 (c); 

11 for use by the States under section 503. 

12 (e) OUTLIER DEFINED.—In this title, the term 

13 ‘‘outlier’’ means a health care provider whose pattern of 

14 practice, relative to applicable practice guidelines, suggests 

15 deficiencies in the quality of health care services being pro16 vided. 

17 SEC. 503. STATE QUALITY REVIEW PROGRAMS. 

18 (a) REQUIREMENT.—In order to meet the require19 ment of section 404(b)(1)(H), each State health security 

20 program shall establish 1 or more qualified entities to con21 duct quality reviews of persons providing covered services 

22 under the program, in accordance with standards estab23 lished under subsection (b)(1) (except as provided in sub24 section (b)(2)) and subsection (d). 

25 (b) FEDERAL STANDARDS.— 

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1 (1) IN GENERAL.—The Council shall establish 

2 standards with respect to— 

3 (A) the adoption of practice guidelines 

4 (whether developed by the Federal Government 

5 or other entities); 

6 (B) the identification of outliers (con7 sistent with methodologies adopted under sec8 tion 502(a)); 

9 (C) the development of remedial programs 

10 and monitoring for outliers; and 

11 (D) the application of sanctions (consistent 

12 with the standards developed under section 

13 502(c)). 

14 (2) STATE DISCRETION.—A State may apply 

15 under subsection (a) standards other than those es16 tablished under paragraph (1) so long as the State 

17 demonstrates to the satisfaction of the Council on an 

18 annual basis that the standards applied have been as 

19 efficacious in promoting and achieving improved 

20 quality of care as the application of the standards 

21 established under paragraph (1). Positive improve22 ments in quality shall be documented by reductions 

23 in the variations of clinical care process and im24 provement in patient outcomes. 

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1 (c) QUALIFICATIONS.—An entity is not qualified to 

2 conduct quality reviews under subsection (a) unless the 

3 entity satisfies the criteria for competence for such entities 

4 developed by the Council under section 501(b)(3). 

5 (d) INTERNAL QUALITY REVIEW.—Nothing in this 

6 section shall preclude an institutional provider from estab7 lishing its own internal quality review and enhancement 

8 programs. 

9 SEC. 504. ELIMINATION OF UTILIZATION REVIEW PRO10 GRAMS; TRANSITION. 

11 (a) INTENT.—It is the intention of this title to re12 place by January 1, 2015, random utilization controls with 

13 a systematic review of patterns of practice that com14 promise the quality of care. 

15 (b) SUPERSEDING CASE REVIEWS.— 

16 (1) IN GENERAL.—Subject to the succeeding 

17 provisions of this subsection, the program of quality 

18 review provided under the previous sections of this 

19 title supersede all existing Federal requirements for 

20 utilization review programs, including requirements 

21 for random case-by-case reviews and programs re22 quiring pre-certification of medical procedures on a 

23 case-by-case basis. 

24 (2) TRANSITION.—Before January 1, 2015, the 

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1 tion review standards and mechanisms as may be 

2 necessary to effect the transition to pattern of prac3 tice-based reviews. 

4 (3) CONSTRUCTION.—Nothing in this sub5 section shall be construed— 

6 (A) as precluding the case-by-case review 

7 of the provision of care— 

8 (i) in individual incidents where the 

9 quality of care has significantly deviated 

10 from acceptable standards of practice; and 

11 (ii) with respect to a provider who has 

12 been determined to be an outlier; or 

13 (B) as precluding the case management of 

14 catastrophic, mental health, or substance abuse 

15 cases or long-term care where such manage16 ment is necessary to achieve appropriate, cost17 effective, and beneficial comprehensive medical 

18 care, as provided for in section 204. 

19 SEC. 505. APPLICATION OF CENTER FOR MEDICARE AND 

20 MEDICAID INNOVATION TO AMERICAN 

21 HEALTH SECURITY PROGRAM. 

22 Section 1115A of the Social Security Act (42 U.S.C. 

23 1315a) is amended by adding at the end the following new 

24 subsection: 

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1 ‘‘(h) APPLICATION TO AMERICAN HEALTH SECURITY

2 PROGRAM.—Notwithstanding any other provision of law 

3 (including the preceding provisions of this section), on and 

4 after January 1, 2013, the duties described in this section 

5 shall be adapted to apply to the American Health Security 

6 Program under the American Health Security Act of 

7 2011. For purposes of carrying out the preceding sen8 tence, effective on such date, the following rules shall 

9 apply: 

10 ‘‘(1) There is created, in consultation with the 

11 American Health Security Standards Board estab12 lished under section 401 of the American Health Se13 curity Act of 2011, within the Department of Health 

14 and Human Services a Center for American Health 

15 Security Innovation (in this subsection referred to as 

16 the ‘Center’) to carry out this subsection. The pur17 pose of the Center is to accelerate the implementa18 tion of new models of care under the American 

19 Health Security Program that would improve patient 

20 care, improve population health, and lower costs in 

21 a manner consistent with the requirements of such 

22 Program. 

23 ‘‘(2) Any references in this section to the ‘Sec24 retary’ or the ‘Centers for Medicare & Medicaid 

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1 Services’ are deemed references to the ‘American 

2 Health Security Standards Board’. 

3 ‘‘(3) Any references in this section to title 

4 XVIII, XIX, or XXI of this Act are deemed ref5 erences to the American Health Security Program. 

6 ‘‘(4) Any references in this section to the ‘Chief 

7 Actuary of the Centers for Medicare & Medicaid 

8 Services’ are deemed references to the ‘Chief Actu9 ary of the Department of Health and Human Serv10 ices’. 

11 ‘‘(5) Any references in this section to the ‘Cen12 ter for Medicare and Medicaid Innovation’ or the 

13 ‘CMI’ are deemed references to the Center for 

14 American Health Security Innovation. 

15 ‘‘(6) For purposes of carrying out this sub16 section, the American Health Security Standards 

17 Board shall provide for the transfer, from the Amer18 ican Health Security Trust Fund under section 801 

19 of the American Health Security Act of 2011, of 

20 such sums as the Board determines necessary, to the 

21 Center.’’. 

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1 TITLE VI—HEALTH SECURITY 

2 BUDGET; PAYMENTS; COST 

3 CONTAINMENT MEASURES 

4 Subtitle A—Budgeting and 

5 Payments to States 

6 SEC. 601. NATIONAL HEALTH SECURITY BUDGET. 

7 (a) NATIONAL HEALTH SECURITY BUDGET.— 

8 (1) IN GENERAL.—By not later than September 

9 1 before the beginning of each year (beginning with 

10 2012), the Board shall establish a national health 

11 security budget, which— 

12 (A) specifies the total expenditures (includ13 ing expenditures for administrative costs) to be 

14 made by the Federal Government and the 

15 States for covered health care services under 

16 this Act; and 

17 (B) allocates those expenditures among the 

18 States consistent with section 604. 

19 Pursuant to subsection (b), such budget for a year 

20 shall not exceed the budget for the preceding year 

21 increased by the percentage increase in gross domes22 tic product. 

23 (2) DIVISION OF BUDGET INTO COMPONENTS.— 

24 In addition to the cost of covered health services, the 

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1 national health security budget shall consist of at 

2 least 4 components: 

3 (A) A component for quality assessment 

4 activities (described in title V). 

5 (B) A component for health professional 

6 education expenditures. 

7 (C) A component for administrative costs. 

8 (D) A component for operating and other 

9 expenditures not described in subparagraphs 

10 (A) through (C) (in this title referred to as the 

11 ‘‘operating component’’), consisting of amounts 

12 not included in the other components. A State 

13 may provide for the allocation of this compo14 nent between capital expenditures and other ex15 penditures. 

16 (3) ALLOCATION AMONG COMPONENTS.—Tak17 ing into account the State health security budgets 

18 established and submitted under section 603, the 

19 Board shall allocate the national health security 

20 budget among the components in a manner that— 

21 (A) assures a fair allocation for quality as22 sessment activities (consistent with the national 

23 health security spending growth limit); and 

24 (B) assures that the health professional 

25 education expenditure component is sufficient 

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1 to provide for the amount of health professional 

2 education expenditures sufficient to meet the 

3 need for covered health care services (consistent 

4 with the national health security spending 

5 growth limit under subsection (b)(2)). 

6 (b) BASIS FOR TOTAL EXPENDITURES.— 

7 (1) IN GENERAL.—The total expenditures speci8 fied in such budget shall be the sum of the capita9 tion amounts computed under section 602(a) and 

10 the amount of Federal administrative expenditures 

11 needed to carry out this Act. 

12 (2) NATIONAL HEALTH SECURITY SPENDING

13 GROWTH LIMIT.—For purposes of this subtitle, the 

14 national health security spending growth limit de15 scribed in this paragraph for a year is (A) zero, or, 

16 if greater, (B) the average annual percentage in17 crease in the gross domestic product (in current dol18 lars) during the 3-year period beginning with the 

19 first quarter of the fourth previous year to the first 

20 quarter of the previous year minus the percentage 

21 increase (if any) in the number of eligible individuals 

22 residing in any State the United States from the 

23 first quarter of the second previous year to the first 

24 quarter of the previous year. 

25 (c) DEFINITIONS.—In this title: 

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1 (1) CAPITAL EXPENDITURES.—The term ‘‘cap2 ital expenditures’’ means expenses for the purchase, 

3 lease, construction, or renovation of capital facilities 

4 and for equipment and includes return on equity 

5 capital. 

6 (2) HEALTH PROFESSIONAL EDUCATION EX7 PENDITURES.—The term ‘‘health professional edu8 cation expenditures’’ means expenditures in hospitals 

9 and other health care facilities to cover costs associ10 ated with teaching and related research activities. 

11 SEC. 602. COMPUTATION OF INDIVIDUAL AND STATE CAPI12 TATION AMOUNTS. 

13 (a) CAPITATION AMOUNTS.— 

14 (1) INDIVIDUAL CAPITATION AMOUNTS.—In es15 tablishing the national health security budget under 

16 section 601(a) and in computing the national aver17 age per capita cost under subsection (b) for each 

18 year, the Board shall establish a method for com19 puting the capitation amount for each eligible indi20 vidual residing in each State. The capitation amount 

21 for an eligible individual in a State classified within 

22 a risk group (established under subsection (d)(2)) is 

23 the product of— 

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1 (A) a national average per capita cost for 

2 all covered health care services (computed 

3 under subsection (b)); 

4 (B) the State adjustment factor (estab5 lished under subsection (c)) for the State; and 

6 (C) the risk adjustment factor (established 

7 under subsection (d)) for the risk group. 

8 (2) STATE CAPITATION AMOUNT.— 

9 (A) IN GENERAL.—For purposes of this 

10 title, the term ‘‘State capitation amount’’ 

11 means, for a State for a year, the sum of the 

12 capitation amounts computed under paragraph 

13 (1) for all the residents of the State in the year, 

14 as estimated by the Board before the beginning 

15 of the year involved. 

16 (B) USE OF STATISTICAL MODEL.—The 

17 Board may provide for the computation of 

18 State capitation amounts based on statistical 

19 models that fairly reflect the elements that com20 prise the State capitation amount described in 

21 subparagraph (A). 

22 (C) POPULATION INFORMATION.—The Bu23 reau of the Census shall assist the Board in de24 termining the number, place of residence, and 

25 risk group classification of eligible individuals. 

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1 (b) COMPUTATION OF NATIONAL AVERAGE PER CAP2 ITA COST.— 

3 (1) FOR 2012.—For 2012, the national average 

4 per capita cost under this paragraph is equal to— 

5 (A) the average per capita health care ex6 penditures in the United States in 2010 (as es7 timated by the Board); 

8 (B) increased to 2011 by the Board’s esti9 mate of the actual amount of such per capita 

10 expenditures during 2011; and 

11 (C) updated to 2012 by the national health 

12 security spending growth limit specified in sec13 tion 601(b)(2) for 2012. 

14 (2) FOR SUCCEEDING YEARS.—For each suc15 ceeding year, the national average per capita cost 

16 under this subsection is equal to the national aver17 age per capita cost computed under this subsection 

18 for the previous year adjusted by the national health 

19 security spending growth limit (specified in section 

20 601(b)(2)) for the year involved. 

21 (c) STATE ADJUSTMENT FACTORS.— 

22 (1) IN GENERAL.—Subject to the succeeding 

23 paragraphs of this subsection, the Board shall de24 velop for each State a factor to adjust the national 

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1 average per capita costs to reflect differences be2 tween the State and the United States in— 

3 (A) average labor and nonlabor costs that 

4 are necessary to provide covered health services; 

5 (B) any social, environmental, or geo6 graphic condition affecting health status or the 

7 need for health care services, to the extent such 

8 a condition is not taken into account in the es9 tablishment of risk groups under subsection (d); 

10 (C) the geographic distribution of the 

11 State’s population, particularly the proportion 

12 of the population residing in medically under13 served areas, to the extent such a condition is 

14 not taken into account in the establishment of 

15 risk groups under subsection (d); and 

16 (D) any other factor relating to operating 

17 costs required to ensure equitable distribution 

18 of funds among the States. 

19 (2) MODIFICATION OF HEALTH PROFESSIONAL

20 EDUCATION COMPONENT.—With respect to the por21 tion of the national health security budget allocated 

22 to expenditures for health professional education, the 

23 Board shall modify the State adjustment factors so 

24 as to take into account— 

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1 (A) differences among States in health 

2 professional education programs in operation as 

3 of the date of the enactment of this Act; and 

4 (B) differences among States in their rel5 ative need for expenditures for health profes6 sional education, taking into account the health 

7 professional education expenditures proposed in 

8 State health security budgets under section 

9 603(a). 

10 (3) BUDGET NEUTRALITY.—The State adjust11 ment factors, as modified under paragraph (2), shall 

12 be applied under this subsection in a manner that 

13 results in neither an increase nor a decrease in the 

14 total amount of the Federal contributions to all 

15 State health security programs under subsection (b) 

16 as a result of the application of such factors. 

17 (4) PHASE-IN.—In applying State adjustment 

18 factors under this subsection during the 5-year pe19 riod beginning with 2012, the Board shall phase-in, 

20 over such period, the use of factors described in 

21 paragraph (1) in a manner so that the adjustment 

22 factor for a State is based on a blend of such factors 

23 and a factor that reflects the relative actual average 

24 per capita costs of health services of the different 

25 States as of the time of enactment of this Act. 

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1 (5) PERIODIC ADJUSTMENT.—In establishing 

2 the national health security budget before the begin3 ning of each year, the Board shall provide for appro4 priate adjustments in the State adjustment factors 

5 under this subsection. 

6 (d) ADJUSTMENTS FOR RISK GROUP CLASSIFICA7 TION.— 

8 (1) IN GENERAL.—The Board shall develop an 

9 adjustment factor to the national average per capita 

10 costs computed under subsection (b) for individuals 

11 classified in each risk group (as designated under 

12 paragraph (2)) to reflect the difference between the 

13 average national average per capita costs and the 

14 national average per capita cost for individuals clas15 sified in the risk group. 

16 (2) RISK GROUPS.—The Board shall designate 

17 a series of risk groups, determined by age, health in18 dicators, and other factors that represent distinct 

19 patterns of health care services utilization and costs. 

20 (3) PERIODIC ADJUSTMENT.—In establishing 

21 the national health security budget before the begin22 ning of each year, the Board shall provide for appro23 priate adjustments in the risk adjustment factors 

24 under this subsection. 

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1 SEC. 603. STATE HEALTH SECURITY BUDGETS. 

2 (a) ESTABLISHMENT AND SUBMISSION OF BUDG3 ETS.— 

4 (1) IN GENERAL.—Each State health security 

5 program shall establish and submit to the Board for 

6 each year a proposed and a final State health secu7 rity budget, which specifies the following: 

8 (A) The total expenditures (including ex9 penditures for administrative costs) to be made 

10 under the program in the State for covered 

11 health care services under this Act, consistent 

12 with subsection (b), broken down as follows: 

13 (i) By the 4 components (described in 

14 section 601(a)(2)), consistent with sub15 section (b). 

16 (ii) Within the operating component— 

17 (I) expenditures for operating 

18 costs of hospitals and other facility19 based services in the State; 

20 (II) expenditures for payment to 

21 comprehensive health service organiza22 tions; 

23 (III) expenditures for payment of 

24 services provided by health care prac25 titioners; and 

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1 (IV) expenditures for other cov2 ered items and services. 

3 Amounts included in the operating compo4 nent include amounts that may be used by 

5 providers for capital expenditures. 

6 (B) The total revenues required to meet 

7 the State health security expenditures. 

8 (2) PROPOSED BUDGET DEADLINE.—The pro9 posed budget for a year shall be submitted under 

10 paragraph (1) not later than June 1 before the year. 

11 (3) FINAL BUDGET.—The final budget for a 

12 year shall— 

13 (A) be established and submitted under 

14 paragraph (1) not later than October 1 before 

15 the year, and 

16 (B) take into account the amounts estab17 lished under the national health security budget 

18 under section 601 for the year. 

19 (4) ADJUSTMENT IN ALLOCATIONS PER20 MITTED.— 

21 (A) IN GENERAL.—Subject to subpara22 graphs (B) and (C), in the case of a final budg23 et, a State may change the allocation of 

24 amounts among components. 

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1 (B) NOTICE.—No such change may be 

2 made unless the State has provided prior notice 

3 of the change to the Board. 

4 (C) DENIAL.—Such a change may not be 

5 made if the Board, within such time period as 

6 the Board specifies, disapproves such change. 

7 (b) EXPENDITURE LIMITS.— 

8 (1) IN GENERAL.—The total expenditures speci9 fied in each State health security budget under sub10 section (a)(1) shall take into account Federal con11 tributions made under section 604. 

12 (2) LIMIT ON CLAIMS PROCESSING AND BILL13 ING EXPENDITURES.—Each State health security 

14 budget shall provide that State administrative ex15 penditures, including expenditures for claims proc16 essing and billing, shall not exceed 3 percent of the 

17 total expenditures under the State health security 

18 program, unless the Board determines, on a case-by19 case basis, that additional administrative expendi20 tures would improve health care quality and cost ef21 fectiveness. 

22 (3) WORKER ASSISTANCE.—A State health se23 curity program may provide that, for budgets for 

24 years before 2015, up to 1 percent of the budget 

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1 sistance to workers who are currently performing 

2 functions in the administration of the health insur3 ance system and who may experience economic dis4 location as a result of the implementation of the pro5 gram. 

6 (c) APPROVAL PROCESS FOR CAPITAL EXPENDI7 TURES PERMITTED.—Nothing in this title shall be con8 strued as preventing a State health security program from 

9 providing for a process for the approval of capital expendi10 tures based on information derived from regional planning 

11 agencies. 

12 SEC. 604. FEDERAL PAYMENTS TO STATES. 

13 (a) IN GENERAL.—Each State with an approved 

14 State health security program is entitled to receive, from 

15 amounts in the American Health Security Trust Fund, on 

16 a monthly basis each year, of an amount equal to one17 twelfth of the product of— 

18 (1) the State capitation amount (computed 

19 under section 602(a)(2)) for the State for the year; 

20 and 

21 (2) the Federal contribution percentage (estab22 lished under subsection (b)). 

23 (b) FEDERAL CONTRIBUTION PERCENTAGE.—The 

24 Board shall establish a formula for the establishment of 

25 a Federal contribution percentage for each State. Such 

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1 formula shall take into consideration a State’s per capita 

2 income and revenue capacity and such other relevant eco3 nomic indicators as the Board determines to be appro4 priate. In addition, during the 5-year period beginning 

5 with 2012, the Board may provide for a transition adjust6 ment to the formula in order to take into account current 

7 expenditures by the State (and local governments thereof) 

8 for health services covered under the State health security 

9 program. The weighted-average Federal contribution per10 centage for all States shall equal 86 percent and in no 

11 event shall such percentage be less than 81 percent nor 

12 more than 91 percent. 

13 (c) USE OF PAYMENTS.—All payments made under 

14 this section may only be used to carry out the State health 

15 security program. 

16 (d) EFFECT OF SPENDING EXCESS OR SURPLUS.— 

17 (1) SPENDING EXCESS.—If a State exceeds its 

18 budget in a given year, the State shall continue to 

19 fund covered health services from its own revenues. 

20 (2) SURPLUS.—If a State provides all covered 

21 health services for less than the budgeted amount 

22 for a year, it may retain its Federal payment for 

23 that year for uses consistent with this Act. 

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1 SEC. 605. ACCOUNT FOR HEALTH PROFESSIONAL EDU2 CATION EXPENDITURES. 

3 (a) SEPARATE ACCOUNT.—Each State health secu4 rity program shall— 

5 (1) include a separate account for health pro6 fessional education expenditures; and 

7 (2) specify the general manner, consistent with 

8 subsection (b), in which such expenditures are to be 

9 distributed among different types of institutions and 

10 the different areas of the State. 

11 (b) DISTRIBUTION RULES.—The distribution of 

12 funds to hospitals and other health care facilities from the 

13 account shall conform to the following principles: 

14 (1) The disbursement of funds shall be con15 sistent with achievement of the national and pro16 gram goals (specified in section 701(b)) within the 

17 State health security program and the distribution 

18 of funds from the account shall be conditioned upon 

19 the receipt of such reports as the Board may require 

20 in order to monitor compliance with such goals. 

21 (2) The distribution of funds from the account 

22 shall take into account the potentially higher costs 

23 of placing health professional students in clinical 

24 education programs in health professional shortage 

25 areas. 

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1 Subtitle B—Payments by States to 

2 Providers 

3 SEC. 611. PAYMENTS TO HOSPITALS AND OTHER FACILITY4 BASED SERVICES FOR OPERATING EXPENSES 

5 ON THE BASIS OF APPROVED GLOBAL BUDG6 ETS. 

7 (a) DIRECT PAYMENT UNDER GLOBAL BUDGET.— 

8 Payment for operating expenses for institutional and facil9 ity-based care, including hospital services and nursing fa10 cility services, under State health security programs shall 

11 be made directly to each institution or facility by each 

12 State health security program under an annual prospec13 tive global budget approved under the program. Such a 

14 budget shall include payment for outpatient care and non15 facility-based care that is furnished by or through the fa16 cility. In the case of a hospital that is wholly owned (or 

17 controlled) by a comprehensive health service organization 

18 that is paid under section 614 on the basis of a global 

19 budget, the global budget of the organization shall include 

20 the budget for the hospital. 

21 (b) ANNUAL NEGOTIATIONS; BUDGET APPROVAL.— 

22 (1) IN GENERAL.—The prospective global budg23 et for an institution or facility shall— 

24 (A) be developed through annual negotia25 tions between— 

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1 (i) a panel of individuals who are ap2 pointed by the Governor of the State and 

3 who represent consumers, labor, business, 

4 and the State government; and 

5 (ii) the institution or facility; and 

6 (B) be based on a nationally uniform sys7 tem of cost accounting established under stand8 ards of the Board. 

9 (2) CONSIDERATIONS.—In developing a budget 

10 through negotiations, there shall be taken into ac11 count at least the following: 

12 (A) With respect to inpatient hospital serv13 ices, the number, and classification by diag14 nosis-related group, of discharges. 

15 (B) An institution’s or facility’s past ex16 penditures. 

17 (C) The extent to which debt service for 

18 capital expenditures has been included in the 

19 proposed operating budget. 

20 (D) The extent to which capital expendi21 tures are financed directly or indirectly through 

22 reductions in direct care to patients, including 

23 reductions in registered nursing staffing pat24 terns or changes in emergency room or primary 

25 care services or availability. 

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1 (E) Change in the consumer price index 

2 and other price indices. 

3 (F) The cost of reasonable compensation 

4 to health care practitioners. 

5 (G) The compensation level of the institu6 tion’s or facility’s work force. 

7 (H) The extent to which the institution or 

8 facility is providing health care services to meet 

9 the needs of residents in the area served by the 

10 institution or facility, including the institution’s 

11 or facility’s occupancy level. 

12 (I) The institution’s or facility’s previous 

13 financial and clinical performance, based on uti14 lization and outcomes data provided under this 

15 Act. 

16 (J) The type of institution or facility, in17 cluding whether the institution or facility is 

18 part of a clinical education program or serves 

19 a health professional education, research or 

20 other training purpose. 

21 (K) Technological advances or changes. 

22 (L) Costs of the institution or facility asso23 ciated with meeting Federal and State regula24 tions. 

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1 (M) The costs associated with necessary 

2 public outreach activities. 

3 (N) Incentives to facilities that maintain 

4 costs below previous reasonable budgeted levels 

5 without reducing the care provided. 

6 (O) With respect to facilities that provide 

7 mental health services and substance abuse 

8 treatment services, any additional costs involved 

9 in the treatment of dually diagnosed individ10 uals. 

11 The portion of such a budget that relates to expendi12 tures for health professional education shall be con13 sistent with the State health security budget for 

14 such expenditures. 

15 (3) PROVISION OF REQUIRED INFORMATION; DI16 AGNOSIS-RELATED GROUP.—No budget for an insti17 tution or facility for a year may be approved unless 

18 the institution or facility has submitted on a timely 

19 basis to the State health security program such in20 formation as the program or the Board shall specify, 

21 including in the case of hospitals information on dis22 charges classified by diagnosis-related group. 

23 (c) ADJUSTMENTS IN APPROVED BUDGETS.— 

24 (1) ADJUSTMENTS TO GLOBAL BUDGETS THAT

25 CONTRACT WITH COMPREHENSIVE HEALTH SERVICE

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1 ORGANIZATIONS.—Each State health security pro2 gram shall develop an administrative mechanism for 

3 reducing operating funds to institutions or facilities 

4 in proportion to payments made to such institutions 

5 or facilities for services contracted for by a com6 prehensive health service organization. 

7 (2) AMENDMENTS.—In accordance with stand8 ards established by the Board, an operating and 

9 capital budget approved under this section for a year 

10 may be amended before, during, or after the year if 

11 there is a substantial change in any of the factors 

12 relevant to budget approval. 

13 (d) DONATIONS PERMISSIBLE.—The States health 

14 security programs may permit institutions and facilities 

15 to raise funds from private sources to pay for newly con16 structed facilities, major renovations, and equipment. The 

17 expenditure of such funds, whether for operating or cap18 ital expenditures, does not obligate the State health secu19 rity program to provide for continued support for such ex20 penditures unless included in an approved global budget. 

21 SEC. 612. PAYMENTS TO HEALTH CARE PRACTITIONERS 

22 BASED ON PROSPECTIVE FEE SCHEDULE. 

23 (a) FEE FOR SERVICE.— 

24 (1) IN GENERAL.—Every independent health 

25 care practitioner is entitled to be paid, for the provimstockstill on DSKH9S0YB1PROD with BILLS

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1 sion of covered health services under the State 

2 health security program, a fee for each billable cov3 ered service. 

4 (2) GLOBAL FEE PAYMENT METHODOLOGIES.— 

5 The Board shall establish models and encourage 

6 State health security programs to implement alter7 native payment methodologies that incorporate glob8 al fees for related services (such as all outpatient 

9 procedures for treatment of a condition) or for a 

10 basic group of services (such as primary care serv11 ices) furnished to an individual over a period of 

12 time, in order to encourage continuity and efficiency 

13 in the provision of services. Such methodologies shall 

14 be designed to ensure a high quality of care. 

15 (3) BILLING DEADLINES; ELECTRONIC BILL16 ING.—A State health security program may deny 

17 payment for any service of an independent health 

18 care practitioner for which it did not receive a bill 

19 and appropriate supporting documentation (which 

20 had been previously specified) within 30 days after 

21 the date the service was provided. Such a program 

22 may require that bills for services for which payment 

23 may be made under this section, or for any class of 

24 such services, be submitted electronically. 

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1 (b) PAYMENT RATES BASED ON NEGOTIATED PRO2 SPECTIVE FEE SCHEDULES.—With respect to any pay3 ment method for a class of services of practitioners, the 

4 State health security program shall establish, on a pro5 spective basis, a payment schedule. The State health secu6 rity program may establish such a schedule after negotia7 tions with organizations representing the practitioners in8 volved. Such fee schedules shall be designed to provide in9 centives for practitioners to choose primary care medicine, 

10 including general internal medicine, family medicine, gyne11 cology, and pediatrics, over medical specialization. Noth12 ing in this section shall be construed as preventing a State 

13 from adjusting the payment schedule amounts on a quar14 terly or other periodic basis depending on whether expend15 itures under the schedule will exceed the budgeted amount 

16 with respect to such expenditures. 

17 (c) BILLABLE COVERED SERVICE DEFINED.—In this 

18 section, the term ‘‘billable covered service’’ means a service 

19 covered under section 201 for which a practitioner is enti20 tled to compensation by payment of a fee determined 

21 under this section. 

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1 SEC. 613. PAYMENTS TO COMPREHENSIVE HEALTH SERV2 ICE ORGANIZATIONS. 

3 (a) IN GENERAL.—Payment under a State health se4 curity program to a comprehensive health service organi5 zation to its enrollees shall be determined by the State— 

6 (1) based on a global budget described in sec7 tion 611; or 

8 (2) based on the basic capitation amount de9 scribed in subsection (b) for each of its enrollees. 

10 (b) BASIC CAPITATION AMOUNT.— 

11 (1) IN GENERAL.—The basic capitation amount 

12 described in this subsection for an enrollee shall be 

13 determined by the State health security program on 

14 the basis of the average amount of expenditures that 

15 is estimated would be made under the State health 

16 security program for covered health care services for 

17 an enrollee, based on actuarial characteristics (as de18 fined by the State health security program). 

19 (2) ADJUSTMENT FOR SPECIAL HEALTH

20 NEEDS.—The State health security program shall 

21 adjust such average amounts to take into account 

22 the special health needs, including a disproportionate 

23 number of medically underserved individuals, of pop24 ulations served by the organization. 

25 (3) ADJUSTMENT FOR SERVICES NOT PRO26 VIDED.—The State health security program shall admstockstill on DSKH9S0YB1PROD with BILLS

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1 just such average amounts to take into account the 

2 cost of covered health care services that are not pro3 vided by the comprehensive health service organiza4 tion under section 303(a). 

5 SEC. 614. PAYMENTS FOR COMMUNITY-BASED PRIMARY 

6 HEALTH SERVICES. 

7 (a) IN GENERAL.—In the case of community-based 

8 primary health services, subject to subsection (b), pay9 ments under a State health security program shall— 

10 (1) be based on a global budget described in 

11 section 611; 

12 (2) be based on the basic primary care capita13 tion amount described in subsection (c) for each in14 dividual enrolled with the provider of such services; 

15 or 

16 (3) be made on a fee-for-service basis under 

17 section 612. 

18 (b) PAYMENT ADJUSTMENT.—Payments under sub19 section (a) may include, consistent with the budgets devel20 oped under this title— 

21 (1) an additional amount, as set by the State 

22 health security program, to cover the costs incurred 

23 by a provider which serves persons not covered by 

24 this Act whose health care is essential to overall 

25 community health and the control of communicable 

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1 disease, and for whom the cost of such care is other2 wise uncompensated; 

3 (2) an additional amount, as set by the State 

4 health security program, to cover the reasonable 

5 costs incurred by a provider that furnishes case 

6 management services (as defined in section 

7 1915(g)(2) of the Social Security Act), transpor8 tation services, and translation services; and 

9 (3) an additional amount, as set by the State 

10 health security program, to cover the costs incurred 

11 by a provider in conducting health professional edu12 cation programs in connection with the provision of 

13 such services. 

14 (c) BASIC PRIMARY CARE CAPITATION AMOUNT.— 

15 (1) IN GENERAL.—The basic primary care capi16 tation amount described in this subsection for an en17 rollee with a provider of community-based primary 

18 health services shall be determined by the State 

19 health security program on the basis of the average 

20 amount of expenditures that is estimated would be 

21 made under the State health security program for 

22 such an enrollee, based on actuarial characteristics 

23 (as defined by the State health security program). 

24 (2) ADJUSTMENT FOR SPECIAL HEALTH

25 NEEDS.—The State health security program shall 

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1 adjust such average amounts to take into account 

2 the special health needs, including a disproportionate 

3 number of medically underserved individuals, of pop4 ulations served by the provider. 

5 (3) ADJUSTMENT FOR SERVICES NOT PRO6 VIDED.—The State health security program shall ad7 just such average amounts to take into account the 

8 cost of community-based primary health services 

9 that are not provided by the provider. 

10 (d) COMMUNITY-BASED PRIMARY HEALTH SERVICES

11 DEFINED.—In this section, the term ‘‘community-based 

12 primary health services’’ has the meaning given such term 

13 in section 202(a). 

14 SEC. 615. PAYMENTS FOR PRESCRIPTION DRUGS. 

15 (a) ESTABLISHMENT OF LIST.— 

16 (1) IN GENERAL.—The Board shall establish a 

17 list of approved prescription drugs and biologicals 

18 that the Board determines are necessary for the 

19 maintenance or restoration of health or of employ20 ability or self-management and eligible for coverage 

21 under this Act. 

22 (2) EXCLUSIONS.—The Board may exclude re23 imbursement under this Act for ineffective, unsafe, 

24 or over-priced products where better alternatives are 

25 determined to be available. 

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1 (b) PRICES.—For each such listed prescription drug 

2 or biological covered under this Act, for insulin, and for 

3 medical foods, the Board shall from time to time deter4 mine a product price or prices which shall constitute the 

5 maximum to be recognized under this Act as the cost of 

6 a drug to a provider thereof. The Board may conduct ne7 gotiations, on behalf of State health security programs, 

8 with product manufacturers and distributors in deter9 mining the applicable product price or prices. 

10 (c) CHARGES BY INDEPENDENT PHARMACIES.— 

11 Each State health security program shall provide for pay12 ment for a prescription drug or biological or insulin fur13 nished by an independent pharmacy based on the drug’s 

14 cost to the pharmacy (not in excess of the applicable prod15 uct price established under subsection (b)) plus a dis16 pensing fee. In accordance with standards established by 

17 the Board, each State health security program, after con18 sultation with representatives of the pharmaceutical pro19 fession, shall establish schedules of dispensing fees, de20 signed to afford reasonable compensation to independent 

21 pharmacies after taking into account variations in their 

22 cost of operation resulting from regional differences, dif23 ferences in the volume of prescription drugs dispensed, dif24 ferences in services provided, the need to maintain expendmstockstill on DSKH9S0YB1PROD with BILLS

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1 itures within the budgets established under this title, and 

2 other relevant factors. 

3 SEC. 616. PAYMENTS FOR APPROVED DEVICES AND EQUIP4 MENT. 

5 (a) ESTABLISHMENT OF LIST.—The Board shall es6 tablish a list of approved durable medical equipment and 

7 therapeutic devices and equipment (including eyeglasses, 

8 hearing aids, and prosthetic appliances), that the Board 

9 determines are necessary for the maintenance or restora10 tion of health or of employability or self-management and 

11 eligible for coverage under this Act. 

12 (b) CONSIDERATIONS AND CONDITIONS.—In estab13 lishing the list under subsection (a), the Board shall take 

14 into consideration the efficacy, safety, and cost of each 

15 item contained on such list, and shall attach to any item 

16 such conditions as the Board determines appropriate with 

17 respect to the circumstances under which, or the frequency 

18 with which, the item may be prescribed. 

19 (c) PRICES.—For each such listed item covered under 

20 this Act, the Board shall from time to time determine a 

21 product price or prices which shall constitute the max22 imum to be recognized under this Act as the cost of the 

23 item to a provider thereof. The Board may conduct nego24 tiations, on behalf of State health security programs, with 

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1 equipment and device manufacturers and distributors in 

2 determining the applicable product price or prices. 

3 (d) EXCLUSIONS.—The Board may exclude from cov4 erage under this Act ineffective, unsafe, or overpriced 

5 products where better alternatives are determined to be 

6 available. 

7 SEC. 617. PAYMENTS FOR OTHER ITEMS AND SERVICES. 

8 In the case of payment for other covered health serv9 ices, the amount of payment under a State health security 

10 program shall be established by the program— 

11 (1) in accordance with payment methodologies 

12 which are specified by the Board, after consultation 

13 with the American Health Security Advisory Coun14 cil, or methodologies established by the State under 

15 section 620; and 

16 (2) consistent with the State health security 

17 budget. 

18 SEC. 618. PAYMENT INCENTIVES FOR MEDICALLY UNDER19 SERVED AREAS. 

20 (a) MODEL PAYMENT METHODOLOGIES.—In addi21 tion to the payment amounts otherwise provided in this 

22 title, the Board shall establish model payment methodolo23 gies and other incentives that promote the provision of 

24 covered health care services in medically underserved 

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1 areas, particularly in rural and inner-city underserved 

2 areas. 

3 (b) CONSTRUCTION.—Nothing in this title shall be 

4 construed as limiting the authority of State health security 

5 programs to increase payment amounts or otherwise pro6 vide additional incentives, consistent with the State health 

7 security budget, to encourage the provision of medically 

8 necessary and appropriate services in underserved areas. 

9 SEC. 619. AUTHORITY FOR ALTERNATIVE PAYMENT METH10 ODOLOGIES. 

11 A State health security program, as part of its plan 

12 under section 404(a), may use a payment methodology 

13 other than a methodology required under this subtitle so 

14 long as— 

15 (1) such payment methodology does not affect 

16 the entitlement of individuals to coverage, the 

17 weighting of fee schedules to encourage an increase 

18 in the number of primary care providers, the ability 

19 of individuals to choose among qualified providers, 

20 the benefits covered under the program, or the com21 pliance of the program with the State health security 

22 budget under subtitle A; and 

23 (2) the program submits periodic reports to the 

24 Board showing the operation and effectiveness of the 

25 alternative methodology, in order for the Board to 

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1 evaluate the appropriateness of applying the alter2 native methodology to other States. 

3 Subtitle C—Mandatory Assignment 

4 and Administrative Provisions 

5 SEC. 631. MANDATORY ASSIGNMENT. 

6 (a) NO BALANCE BILLING.—Payments for benefits 

7 under this Act shall constitute payment in full for such 

8 benefits and the entity furnishing an item or service for 

9 which payment is made under this Act shall accept such 

10 payment as payment in full for the item or service and 

11 may not accept any payment or impose any charge for 

12 any such item or service other than accepting payment 

13 from the State health security program in accordance with 

14 this Act. 

15 (b) ENFORCEMENT.—If an entity knowingly and will16 fully bills for an item or service or accepts payment in 

17 violation of subsection (a), the Board may apply sanctions 

18 against the entity in the same manner as sanctions could 

19 have been imposed under section 1842(j)(2) of the Social 

20 Security Act for a violation of section 1842(j)(1) of such 

21 Act. Such sanctions are in addition to any sanctions that 

22 a State may impose under its State health security pro23 gram. 

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1 SEC. 632. PROCEDURES FOR REIMBURSEMENT; APPEALS. 

2 (a) PROCEDURES FOR REIMBURSEMENT.—In accord3 ance with standards issued by the Board, a State health 

4 security program shall establish a timely and administra5 tively simple procedure to ensure payment within 60 days 

6 of the date of submission of clean claims by providers 

7 under this Act. 

8 (b) APPEALS PROCESS.—Each State health security 

9 program shall establish an appeals process to handle all 

10 grievances pertaining to payment to providers under this 

11 title. 

12 TITLE VII—PROMOTION OF PRI13 MARY HEALTH CARE; DEVEL14 OPMENT OF HEALTH SERV15 ICE CAPACITY; PROGRAMS TO 

16 ASSIST THE MEDICALLY UN17 DERSERVED 

18 Subtitle A—Promotion and Expan19 sion of Primary Care Profes20 sional Training 

21 SEC. 701. ROLE OF BOARD; ESTABLISHMENT OF PRIMARY 

22 CARE PROFESSIONAL OUTPUT GOALS. 

23 (a) IN GENERAL.—The Board is responsible for— 

24 (1) coordinating health professional education 

25 policies and goals, in consultation with the Secretary 

26 of Health and Human Services (in this title referred 

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1 to as the ‘‘Secretary’’), to achieve the national goals 

2 specified in subsection (b); 

3 (2) overseeing the health professional education 

4 expenditures of the State health security programs 

5 from the account established under section 602(c); 

6 (3) developing and maintaining, in cooperation 

7 with the Secretary, a system to monitor the number 

8 and specialties of individuals through their health 

9 professional education, any postgraduate training, 

10 and professional practice; 

11 (4) developing, coordinating, and promoting 

12 other policies that expand the number of primary 

13 care practitioners, registered nurses, midlevel practi14 tioners, and dentists; and 

15 (5) recommending the appropriate training, 

16 education, and patient advocacy enhancements of 

17 primary care health professionals, including reg18 istered nurses, to achieve uniform high quality care 

19 and patient safety. 

20 (b) NATIONAL GOALS.—The national goals specified 

21 in this subsection are as follows: 

22 (1) GRADUATE MEDICAL EDUCATION.—By not 

23 later than 5 years after the date of the enactment 

24 of this Act, at least 50 percent of the residents in 

25 medical residency education programs (as defined in 

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1 subsection (e)(2)) are primary care residents (as de2 fined in subsection (e)(4)). 

3 (2) REGISTERED NURSES.—To ensure an ade4 quate supply of registered nurses, there shall be a 

5 number, specified by the Board, of registered nurses 

6 employed in the health care system as of January 1, 

7 2015. 

8 (3) MIDLEVEL PRIMARY CARE PRACTI9 TIONERS.—To ensure an adequate supply of primary 

10 care practitioners, there shall be a number, specified 

11 by the Board, of midlevel primary care practitioners 

12 (as defined in subsection (e)(3)) employed in the 

13 health care system as of January 1, 2015. 

14 (4) DENTISTRY.—To ensure an adequate sup15 ply of dental care practitioners, there shall be a 

16 number, specified by the Board, of dentists (as de17 fined in subsection (e)(1)) employed in the health 

18 care system as of January 1, 2015. 

19 (c) METHOD FOR ATTAINMENT OF NATIONAL GOAL

20 FOR GRADUATE MEDICAL EDUCATION; PROGRAM

21 GOALS.— 

22 (1) IN GENERAL.—The Board, in consultation 

23 with the National Health Care Workforce Commis24 sion, shall establish a method of applying the na25 tional goal in subsection (b)(1) to program goals for 

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1 each medical residency education program or to 

2 medical residency education consortia. 

3 (2) CONSIDERATION.—The program goals 

4 under paragraph (1) shall be based on the distribu5 tion of medical schools and other teaching facilities 

6 within each State health security program, and the 

7 number of positions for graduate medical education. 

8 (3) MEDICAL RESIDENCY EDUCATION CONSOR9 TIUM.—In this subsection, the term ‘‘medical resi10 dency education consortium’’ means a consortium of 

11 medical residency education programs in a contig12 uous geographic area (which may be an interstate 

13 area) if the consortium— 

14 (A) includes at least 1 medical school with 

15 a teaching hospital and related teaching set16 tings; and 

17 (B) has an affiliation with qualified com18 munity-based primary health service providers 

19 described in section 202(a) and with at least 1 

20 comprehensive health service organization es21 tablished under section 303. 

22 (4) ENFORCEMENT THROUGH STATE HEALTH

23 SECURITY BUDGETS.—The Board shall develop a 

24 formula for reducing payments to State health secu25 rity programs (that provide for payments to a medmstockstill on DSKH9S0YB1PROD with BILLS

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1 ical residency education program) that failed to meet 

2 the goal for the program established under this sub3 section. 

4 (d) METHOD FOR ATTAINMENT OF NATIONAL GOAL

5 FOR MIDLEVEL PRIMARY CARE PRACTITIONERS.—To as6 sist in attaining the national goal identified in subsection 

7 (b)(3), the Board, in consultation with the National 

8 Health Care Workforce Commission, shall— 

9 (1) advise the Public Health Service on alloca10 tions of funding under titles VII and VIII of the 

11 Public Health Service Act, the National Health 

12 Service Corps, and other programs in order to in13 crease the supply of midlevel primary care practi14 tioners; and 

15 (2) commission a study of the potential benefits 

16 and disadvantages of expanding the scope of practice 

17 authorized under State laws for any class of midlevel 

18 primary care practitioners. 

19 (e) DEFINITIONS.—In this title: 

20 (1) DENTIST.—The term ‘‘dentist’’ means a 

21 practitioner who performs the evaluation, diagnosis, 

22 prevention or treatment (nonsurgical, surgical, or re23 lated procedures) of diseases, disorders or conditions 

24 of the oral cavity, maxillofacial area or the adjacent 

25 and associated structures and their impact on the 

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1 human body, within the scope of his or her edu2 cation, training and experience, in accordance with 

3 the ethics of the profession and applicable law. 

4 (2) MEDICAL RESIDENCY EDUCATION PRO5 GRAM.—The term ‘‘medical residency education pro6 gram’’ means a program that provides education 

7 and training to graduates of medical schools in order 

8 to meet requirements for licensing and certification 

9 as a physician, and includes the medical school su10 pervising the program and includes the hospital or 

11 other facility in which the program is operated. 

12 (3) MIDLEVEL PRIMARY CARE PRACTI13 TIONER.—The term ‘‘midlevel primary care practi14 tioner’’ means a clinical nurse practitioner, certified 

15 nurse midwife, physician assistance, or other non16 physician practitioner, specified by the Board, as au17 thorized to practice under State law. 

18 (4) PRIMARY CARE RESIDENT.—The term ‘‘pri19 mary care resident’’ means (in accordance with cri20 teria established by the Board) a resident being 

21 trained in a distinct program of family practice med22 icine, general practice, general internal medicine, or 

23 general pediatrics. 

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1 SEC. 702. GRANTS FOR HEALTH PROFESSIONS EDUCATION, 

2 NURSE EDUCATION, AND THE NATIONAL 

3 HEALTH SERVICE CORPS. 

4 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.—The 

5 Board shall make transfers from the American Health Se6 curity Trust Fund to the Public Health Service under sub7 part II of part D of title III, title VII, and title VIII of 

8 the Public Health Service Act for the support of the Na9 tional Health Service Corps, health professions education, 

10 and nursing education, including education of clinical 

11 nurse practitioners, certified registered nurse anesthetists, 

12 certified nurse midwives, and physician assistants. 

13 (b) RANGE OF FUNDS.—The amount of transfers 

14 under subsection (a) for any fiscal year for title VII and 

15 VIII shall be an amount (specified by the Board each 

year) not less than 3 16 ⁄100 percent of the amounts the Board 

17 estimates will be expended from the Trust Fund in the 

18 fiscal year. 

19 (c) MAINTENANCE.—The Board shall make no trans20 fer of funds under this section for any fiscal year for which 

21 the total appropriations for the programs authorized by 

22 the provisions referred to in subsection (a) are less than 

23 the total amount appropriated for such programs in fiscal 

24 year 2010. 

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1 Subtitle B—Direct Health Care 

2 Delivery 

3 SEC. 711. SET-ASIDE FOR PUBLIC HEALTH. 

4 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

5 From the amounts provided under subsection (c), the 

6 Board shall make transfers from the American Health Se7 curity Trust Fund to the Public Health Service for the 

8 following purposes (other than payment for services cov9 ered under title II): 

10 (1) For payments to States under the maternal 

11 and child health block grants under title V of the 

12 Social Security Act (42 U.S.C. 701 et seq.). 

13 (2) For prevention and treatment of tuber14 culosis under section 317 of the Public Health Serv15 ice Act (42 U.S.C. 247b). 

16 (3) For the prevention and treatment of sexu17 ally transmitted diseases under section 318 of the 

18 Public Health Service Act (42 U.S.C. 247c). 

19 (4) Preventive health block grants under part A 

20 of title XIX of the Public Health Service Act (42 

21 U.S.C. 300w et seq.). 

22 (5) Grants to States for community mental 

23 health services under subpart I of part B of title 

24 XIX of the Public Health Service Act (42 U.S.C. 

25 300x et seq.). 

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1 (6) Grants to States for prevention and treat2 ment of substance abuse under subpart II of part B 

3 of title XIX of the Public Health Service Act (42 

4 U.S.C. 300x–21 et seq.). 

5 (7) Grants for HIV health care services under 

6 parts A, B, and C of title XXVI of the Public 

7 Health Service Act (42 U.S.C. 300ff–11 et seq.). 

8 (8) Public health formula grants described in 

9 subsection (d). 

10 (b) RANGE OF FUNDS.—The amount of transfers 

11 under subsection (a) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 1 12 ⁄10 percent and not to exceed 14 13 ⁄100 percent of the amounts the 

14 Board estimates will be expended from the Trust Fund 

15 in the fiscal year. 

16 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

17 funds provided under this section with respect to provision 

18 of services are in addition to, and not in replacement of, 

19 funds made available under the programs referred to in 

20 subsection (a) and shall be administered in accordance 

21 with the terms of such programs. 

22 (d) REQUIRED REPORTS ON HEALTH STATUS.—The 

23 Secretary shall require each State receiving funds under 

24 this section to submit annual reports to the Secretary on 

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1 tives for improving the health of the public in the State. 

2 Such reports shall include the following: 

3 (1) A comparison of the measures of the State 

4 and local public health system compared to relevant 

5 objectives set forth in ‘‘Healthy People 2020’’ or 

6 subsequent national objectives set by the Secretary. 

7 (2) A description of health status measures to 

8 be improved within the State (at the State and local 

9 levels) through expanded public health functions and 

10 health promotion and disease prevention programs. 

11 (3) Measurable outcomes and process objectives 

12 for improving health status, and a report on out13 comes from the previous year. 

14 (4) Information regarding how Federal funding 

15 has improved population-based prevention activities 

16 and programs. 

17 (5) A description of the core public health func18 tions to be carried out at the local level. 

19 (6) A description of the relationship between 

20 the State’s public health system, community-based 

21 health promotion and disease prevention providers, 

22 and the State health security program. 

23 (e) LIMITATION ON FUND TRANSFERS.—The Board 

24 shall make no transfer of funds under this section for any 

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1 grams are less than the total amount appropriated for 

2 such programs in fiscal year 2010. 

3 (f) PUBLIC HEALTH FORMULA GRANTS.—The Sec4 retary shall provide stable funds to States through for5 mula grants for the purpose of carrying out core public 

6 health functions to monitor and protect the health of com7 munities from communicable diseases and exposure to 

8 toxic environmental pollutants, occupational hazards, 

9 harmful products, and poor health outcomes. Such func10 tions include the following: 

11 (1) Data collection, analysis, and assessment of 

12 public health data, vital statistics, and personal 

13 health data to assess community health status and 

14 outcomes reporting. This function includes the ac15 quisition and installation of hardware and software, 

16 and personnel training and technical assistance to 

17 operate and support automated and integrated infor18 mation systems. 

19 (2) Activities to protect the environment and to 

20 ensure the safety of housing, workplaces, food, and 

21 water. 

22 (3) Investigation and control of adverse health 

23 conditions, and threats to the health status of indi24 viduals and the community. This function includes 

25 the identification and control of outbreaks of infecmstockstill on DSKH9S0YB1PROD with BILLS

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1 tious disease, patterns of chronic disease and injury, 

2 and cooperative activities to reduce the levels of vio3 lence. 

4 (4) Health promotion and disease prevention 

5 activities for which there is a significant need and a 

6 high priority of the Public Health Service. 

7 (5) The provision of public health laboratory 

8 services to complement private clinical laboratory 

9 services, including— 

10 (A) screening tests for metabolic diseases 

11 in newborns; 

12 (B) toxicology assessments of blood lead 

13 levels and other environmental toxins; 

14 (C) tuberculosis and other diseases requir15 ing partner notification; and 

16 (D) testing for infectious and food-borne 

17 diseases. 

18 (6) Training and education for the public 

19 health professions. 

20 (7) Research on effective and cost-effective pub21 lic health practices. This function includes the devel22 opment, testing, evaluation, and publication of re23 sults of new prevention and public health control 

24 interventions. 

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1 (8) Integration and coordination of the preven2 tion programs and services of community-based pro3 viders, local and State health departments, and 

4 other sectors of State and local government that af5 fect health. 

6 SEC. 712. SET-ASIDE FOR PRIMARY HEALTH CARE DELIV7 ERY. 

8 (a) TRANSFERS TO SECTION 330 PROGRAM OF THE

9 PUBLIC HEALTH SERVICE ACT.—The Board shall make 

10 transfers from the American Health Security Trust Fund 

11 to the Public Health Service for the program authorized 

12 under section 330 of the Public Health Service Act (42 

13 U.S.C. 254b). 

14 (b) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

15 From the amounts provided under subsection (d), the 

16 Board shall make transfers from the American Health Se17 curity Trust Fund to the Public Health Service for the 

18 program of primary care service expansion grants under 

19 subpart V of part D of title III of the Public Health Serv20 ice Act (as added by section 713 of this Act). 

21 (c) RANGE OF FUNDS.—The amount of transfers 

22 under subsection (b) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 6 23 ⁄100 per24 cent of the amounts the Board estimates will be expended 

25 from the Trust Fund in the fiscal year. 

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1 (d) FUNDS SUPPLEMENTAL TO OTHER FUNDS.— 

2 The funds provided under this section with respect to pro3 vision of services are in addition to, and not in replace4 ment of, funds made available under the sections 340A, 

5 1001, and 2655 of the Public Health Service Act. The 

6 Board shall make no transfer of funds under this section 

7 for any fiscal year for which the total appropriations for 

8 such sections are less than the total amount appropriated 

9 under such sections in fiscal year 2010. 

10 SEC. 713. PRIMARY CARE SERVICE EXPANSION GRANTS. 

11 (a) IN GENERAL.—Part D of title III of the Public 

12 Health Service Act (42 U.S.C. 254b et seq.) is amended 

13 by adding at the end the following new subpart: 

14 ‘‘Subpart XIII—Primary Care Expansion 

15 ‘‘SEC. 340J. EXPANDING PRIMARY CARE DELIVERY CAPAC16 ITY IN URBAN AND RURAL AREAS. 

17 ‘‘(a) GRANTS FOR PRIMARY CARE CENTERS.—From 

18 the amounts described in subsection (c), the American 

19 Health Security Standards Board shall make grants to 

20 public and nonprofit private entities for projects to plan 

21 and develop primary care centers which will serve medi22 cally underserved populations (as defined in section 

23 330(b)(3)) in urban and rural areas and to deliver primary 

24 care services to such populations in such areas. The funds 

25 provided under such a grant may be used for the same 

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1 purposes for which a grant may be made under subsection 

2 (c), (e), (f), (g), (h), or (i) of section 330. 

3 ‘‘(b) PROCESS OF AWARDING GRANTS.—The provi4 sions of subsection (k)(1) of section 330 shall apply to 

5 a grant under this section in the same manner as they 

6 apply to a grant under the corresponding subsection of 

7 such section. The provisions of subsection (r)(2)(A) of 

8 such section shall apply to grants for projects to plan and 

9 develop primary care centers under this section in the 

10 same manner as they apply to grants under such section. 

11 ‘‘(c) FUNDING AS SET-ASIDE FROM TRUST FUND.— 

12 Funds in the American Health Security Trust Fund (es13 tablished under section 801 of the act) shall be available 

14 to carry out this section. 

15 ‘‘(d) PRIMARY CARE CENTER DEFINED.—In this sec16 tion, the term ‘primary care center’ means— 

17 ‘‘(1) a health center (as defined in section 

18 330(a)(1)); 

19 ‘‘(2) an entity qualified to receive a grant under 

20 section 330, 1001, or 2651; or 

21 ‘‘(3) a Federally-qualified health center (as de22 fined in section 1905(l)(2)(B) of the Social Security 

23 Act).’’. 

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1 (b) TECHNICAL AMENDMENTS.—Part D of title III 

2 of the Public Health Service Act (42 U.S.C. 254b et seq.) 

3 is amended— 

4 (1) by redesignating subpart XI, as added by 

5 section 10333 of the Patient Protection and Afford6 able Care Act (Public Law 111–148), as subpart 

7 XII; and 

8 (2) by redesignating section 340H of the Public 

9 Health Service Act (42 U.S.C. 256i), as added by 

10 section 10333 of the Patient Protection and Afford11 able Care Act (Public Law 111–148), as section 

12 340I. 

13 Subtitle C—Primary Care and 

14 Outcomes Research 

15 SEC. 721. SET-ASIDE FOR OUTCOMES RESEARCH. 

16 (a) GRANTS FOR OUTCOMES RESEARCH.—The 

17 Board shall make transfers from the American Health Se18 curity Trust Fund to the Agency for Healthcare Research 

19 and Quality under title IX of the Public Health Service 

20 Act (42 U.S.C. 299 et seq.) for the purpose of carrying 

21 out activities under such title. The Secretary shall assure 

22 that there is a special emphasis placed on pediatric out23 comes research. 

24 (b) RANGE OF FUNDS.—The amount of transfers 

25 under subsection (a) for any fiscal year shall be an amount 

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(specified by the Board each year) not less than 1 1 ⁄100 percent and not to exceed 2 2 ⁄100 percent of the amounts the 

3 Board estimates will be expended from the Trust Fund 

4 in the fiscal year. 

5 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

6 funds provided under this section with respect to provision 

7 of services are in addition to, and not in replacement of, 

8 funds made available to the Agency for Healthcare Re9 search and Quality under section 947 of the Public Health 

10 Service Act (42 U.S.C. 299c–6). The Board shall make 

11 no transfer of funds under this section for any fiscal year 

12 for which the total appropriations under such section are 

13 less than the total amount appropriated under such sec14 tion and title in fiscal year 2010. 

15 (d) CONFORMING AMENDMENT.—Section 947(b) of 

16 the Public Health Service Act (42 U.S.C. 299c–6(b)) is 

17 amended by inserting after ‘‘of the fiscal years 2001 

18 through 2005’’ the following: ‘‘and of fiscal year 2012 and 

19 each subsequent year’’. 

20 SEC. 722. OFFICE OF PRIMARY CARE AND PREVENTION RE21 SEARCH. 

22 (a) IN GENERAL.—Title IV of the Public Health 

23 Service Act is amended— 

24 (1) by redesignating parts G through I as parts 

25 H through J, respectively; and 

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1 (2) by inserting after part F the following new 

2 part: 

3 ‘‘PART G—RESEARCH ON PRIMARY CARE AND 

4 PREVENTION 

5 ‘‘SEC. 486E. OFFICE OF PRIMARY CARE AND PREVENTION 

6 RESEARCH. 

7 ‘‘(a) ESTABLISHMENT.—There is established within 

8 the Office of the Director of NIH an office to be known 

9 as the Office of Primary Care and Prevention Research 

10 (in this part referred to as the ‘Office’). The Office shall 

11 be headed by a director, who shall be appointed by the 

12 Director of NIH. 

13 ‘‘(b) PURPOSE.—The Director of the Office shall— 

14 ‘‘(1) identify projects of research on primary 

15 care and prevention, for children as well as adults, 

16 that should be conducted or supported by the na17 tional research institutes, with particular emphasis 

18 on— 

19 ‘‘(A) clinical patient care, with special em20 phasis on pediatric clinical care and diagnosis; 

21 ‘‘(B) diagnostic effectiveness; 

22 ‘‘(C) primary care education; 

23 ‘‘(D) health and family planning services; 

24 ‘‘(E) medical effectiveness outcomes of pri25 mary care procedures and interventions; and 

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1 ‘‘(F) the use of multidisciplinary teams of 

2 health care practitioners; 

3 ‘‘(2) identify multidisciplinary research related 

4 to primary care and prevention that should be so 

5 conducted; 

6 ‘‘(3) promote coordination and collaboration 

7 among entities conducting research identified under 

8 any of paragraphs (1) and (2); 

9 ‘‘(4) encourage the conduct of such research by 

10 entities receiving funds from the national research 

11 institutes; 

12 ‘‘(5) recommend an agenda for conducting and 

13 supporting such research; 

14 ‘‘(6) promote the sufficient allocation of the re15 sources of the national research institutes for con16 ducting and supporting such research; and 

17 ‘‘(7) prepare the report required under section 

18 486G. 

19 ‘‘(c) PRIMARY CARE AND PREVENTION RESEARCH

20 DEFINED.—For purposes of this part, the term ‘primary 

21 care and prevention research’ means research on improve22 ment of the practice of family medicine, general internal 

23 medicine, and general pediatrics, and includes research re24 lating to— 

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1 ‘‘(1) obstetrics and gynecology, dentistry, or 

2 mental health or substance abuse treatment when 

3 provided by a primary care physician or other pri4 mary care practitioner; and 

5 ‘‘(2) primary care provided by multidisciplinary 

6 teams. 

7 ‘‘SEC. 486F. NATIONAL DATA SYSTEM AND CLEARINGHOUSE 

8 ON PRIMARY CARE AND PREVENTION RE9 SEARCH. 

10 ‘‘(a) DATA SYSTEM.—The Director of NIH, in con11 sultation with the Director of the Office, shall establish 

12 a data system for the collection, storage, analysis, re13 trieval, and dissemination of information regarding pri14 mary care and prevention research that is conducted or 

15 supported by the national research institutes. Information 

16 from the data system shall be available through informa17 tion systems available to health care professionals and pro18 viders, researchers, and members of the public. 

19 ‘‘(b) CLEARINGHOUSE.—The Director of NIH, in 

20 consultation with the Director of the Office and with the 

21 National Library of Medicine, shall establish, maintain, 

22 and operate a program to provide, and encourage the use 

23 of, information on research and prevention activities of the 

24 national research institutes that relate to primary care 

25 and prevention research. 

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1 ‘‘SEC. 486G. BIENNIAL REPORT. 

2 ‘‘(a) IN GENERAL.—With respect to primary care 

3 and prevention research, the Director of the Office shall, 

4 not later than 1 year after the date of the enactment of 

5 this part, and biennially thereafter, prepare a report— 

6 ‘‘(1) describing and evaluating the progress 

7 made during the preceding 2 fiscal years in research 

8 and treatment conducted or supported by the Na9 tional Institutes of Health; 

10 ‘‘(2) summarizing and analyzing expenditures 

11 made by the agencies of such Institutes (and by 

12 such Office) during the preceding 2 fiscal years; and 

13 ‘‘(3) making such recommendations for legisla14 tive and administrative initiatives as the Director of 

15 the Office determines to be appropriate. 

16 ‘‘(b) INCLUSION IN BIENNIAL REPORT OF DIRECTOR

17 OF NIH.—The Director of the Office shall submit each 

18 report prepared under subsection (a) to the Director of 

19 NIH for inclusion in the report submitted to the President 

20 and the Congress under section 403. 

21 ‘‘SEC. 486H. AUTHORIZATION OF APPROPRIATIONS. 

22 ‘‘For the Office of Primary Care and Prevention Re23 search, there are authorized to be appropriated 

24 $150,000,000 for fiscal year 2012, $180,000,000 for fis25 cal year 2013, and $216,000,000 for fiscal year 2014.’’. 

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1 (b) REQUIREMENT OF SUFFICIENT ALLOCATION OF

2 RESOURCES OF INSTITUTES.—Section 402(b) of the Pub3 lic Health Service Act (42 U.S.C. 282(b)) is amended— 

4 (1) in paragraph (23), by striking ‘‘and’’ after 

5 the semicolon at the end; 

6 (2) in paragraph (24), by striking the period at 

7 the end and inserting ‘‘; and’’; and 

8 (3) by inserting after paragraph (24) the fol9 lowing new paragraph: 

10 ‘‘(25) after consultation with the Director of 

11 the Office of Primary Care and Prevention Re12 search, shall ensure that resources of the National 

13 Institutes of Health are sufficiently allocated for 

14 projects on primary care and prevention research 

15 that are identified under section 486E(b).’’. 

16 Subtitle D—School-Related Health 

17 Services 

18 SEC. 731. AUTHORIZATIONS OF APPROPRIATIONS. 

19 (a) FUNDING FOR SCHOOL-RELATED HEALTH SERV20 ICES.—For the purpose of carrying out this subtitle, there 

21 are authorized to be appropriated $100,000,000 for fiscal 

22 year 2014, $275,000,000 for fiscal year 2015, 

23 $350,000,000 for fiscal year 2016, and $400,000,000 for 

24 each of the fiscal years 2017 and 2018. 

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1 (b) RELATION TO OTHER FUNDS.—The authoriza2 tions of appropriations established in subsection (a) are 

3 in addition to any other authorizations of appropriations 

4 that are available for the purpose described in such sub5 section. 

6 SEC. 732. ELIGIBILITY FOR DEVELOPMENT AND OPER7 ATION GRANTS. 

8 (a) IN GENERAL.—Entities eligible to apply for and 

9 receive grants under section 734 or 735 are the following: 

10 (1) State health agencies that apply on behalf 

11 of local community partnerships and other commu12 nities in need of health services for school-aged chil13 dren within the State. 

14 (2) Local community partnerships in States in 

15 which health agencies have not applied. 

16 (b) LOCAL COMMUNITY PARTNERSHIPS.— 

17 (1) IN GENERAL.—A local community partner18 ship under subsection (a)(2) is an entity that, at a 

19 minimum, includes— 

20 (A) a local health care provider with expe21 rience in delivering services to school-aged chil22 dren; 

23 (B) 1 or more local public schools; and 

24 (C) at least 1 community based organiza25 tion located in the community to be served that 

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1 has a history of providing services to school2 aged children in the community who are at-risk. 

3 (2) PARTICIPATION.—A partnership described 

4 in paragraph (1) shall, to the maximum extent fea5 sible, involve broad based community participation 

6 from parents and adolescent children to be served, 

7 health and social service providers, teachers and 

8 other public school and school board personnel, de9 velopment and service organizations for adolescent 

10 children, and interested business leaders. Such par11 ticipation may be evidenced through an expanded 

12 partnership, or an advisory board to such partner13 ship. 

14 (c) DEFINITIONS REGARDING CHILDREN.—For pur15 poses of this subtitle: 

16 (1) The term ‘‘adolescent children’’ means 

17 school-aged children who are adolescents. 

18 (2) The term ‘‘school-aged children’’ means in19 dividuals who are between the ages of 4 and 19 (in20 clusive). 

21 SEC. 733. PREFERENCES. 

22 (a) IN GENERAL.—In making grants under sections 

23 734 and 735, the Secretary shall give preference to appli24 cants whose communities to be served show the most sub25 stantial level of need for such services among school-aged 

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1 children, as measured by indicators of community health 

2 including the following: 

3 (1) High levels of poverty. 

4 (2) The presence of a medically underserved 

5 population. 

6 (3) The presence of a health professional short7 age area. 

8 (4) High rates of indicators of health risk 

9 among school-aged children, including a high propor10 tion of such children receiving services through the 

11 Individuals with Disabilities Education Act, adoles12 cent pregnancy, sexually transmitted disease (includ13 ing infection with the human immunodeficiency 

14 virus), preventable disease, communicable disease, 

15 intentional and unintentional injuries, community 

16 and gang violence, unemployment among adolescent 

17 children, juvenile justice involvement, and high rates 

18 of drug and alcohol exposure. 

19 (b) LINKAGE TO COMMUNITY HEALTH CENTERS.— 

20 In making grants under sections 734 and 735, the Sec21 retary shall give preference to applicants that demonstrate 

22 a linkage to community health centers. 

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1 SEC. 734. GRANTS FOR DEVELOPMENT OF PROJECTS. 

2 (a) IN GENERAL.—The Secretary may make grants 

3 to State health agencies or to local community partner4 ships to develop school health service sites. 

5 (b) USE OF FUNDS.—A project for which a grant 

6 may be made under subsection (a) may include the cost 

7 of the following: 

8 (1) Planning for the provision of school health 

9 services. 

10 (2) Recruitment, compensation, and training of 

11 health and administrative staff. 

12 (3) The development of agreements, and the ac13 quisition and development of equipment and infor14 mation services, necessary to support information 

15 exchange between school health service sites and 

16 health plans, health providers, and other entities au17 thorized to collect information under this Act. 

18 (4) Other activities necessary to assume oper19 ational status. 

20 (c) APPLICATION FOR GRANT.— 

21 (1) IN GENERAL.—Applicants shall submit ap22 plications in a form and manner prescribed by the 

23 Secretary. 

24 (2) APPLICATIONS BY STATE HEALTH AGEN25 CIES.— 

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1 (A) In the case of applicants that are State 

2 health agencies, the application shall contain 

3 assurances that the State health agency is ap4 plying for funds— 

5 (i) on behalf of at least 1 local com6 munity partnership; and 

7 (ii) on behalf of at least 1 other com8 munity identified by the State as in need 

9 of the services funded under this subtitle 

10 but without a local community partnership. 

11 (B) In the case of the communities identi12 fied in applications submitted by State health 

13 agencies that do not yet have local community 

14 partnerships (including the community identi15 fied under subparagraph (A)(ii)), the State 

16 shall describe the steps that will be taken to aid 

17 the communities in developing a local commu18 nity partnership. 

19 (C) A State applying on behalf of local 

20 community partnerships and other communities 

21 may retain not more than 10 percent of grants 

22 awarded under this subtitle for administrative 

23 costs. 

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1 (d) CONTENTS OF APPLICATION.—In order to receive 

2 a grant under this section, an applicant shall include in 

3 the application the following information: 

4 (1) An assessment of the need for school health 

5 services in the communities to be served, using the 

6 latest available health data and health goals and ob7 jectives established by the Secretary. 

8 (2) A description of how the applicant will de9 sign the proposed school health services to reach the 

10 maximum number of school-aged children who are at 

11 risk. 

12 (3) An explanation of how the applicant will in13 tegrate its services with those of other health and 

14 social service programs within the community. 

15 (4) A description of a quality assurance pro16 gram which complies with standards that the Sec17 retary may prescribe. 

18 (e) NUMBER OF GRANTS.—Not more than 1 planning 

19 grant may be made to a single applicant. A planning grant 

20 may not exceed 2 years in duration. 

21 SEC. 735. GRANTS FOR OPERATION OF PROJECTS. 

22 (a) IN GENERAL.—The Secretary may make grants 

23 to State health agencies or to local community partner24 ships for the cost of operating school health service sites. 

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1 (b) USE OF GRANT.—The costs for which a grant 

2 may be made under this section include the following: 

3 (1) The cost of furnishing health services that 

4 are not otherwise covered under this Act or by any 

5 other public or private insurer. 

6 (2) The cost of furnishing services whose pur7 pose is to increase the capacity of individuals to uti8 lize available health services, including transpor9 tation, community and patient outreach, patient 

10 education, translation services, and such other serv11 ices as the Secretary determines to be appropriate in 

12 carrying out such purpose. 

13 (3) Training, recruitment and compensation of 

14 health professionals and other staff. 

15 (4) Outreach services to school-aged children 

16 who are at risk and to the parents of such children. 

17 (5) Linkage of individuals to health plans, com18 munity health services and social services. 

19 (6) Other activities deemed necessary by the 

20 Secretary. 

21 (c) APPLICATION FOR GRANT.—Applicants shall sub22 mit applications in a form and manner prescribed by the 

23 Secretary. In order to receive a grant under this section, 

24 an applicant shall include in the application the following 

25 information: 

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1 (1) A description of the services to be furnished 

2 by the applicant. 

3 (2) The amounts and sources of funding that 

4 the applicant will expend, including estimates of the 

5 amount of payments the applicant will receive from 

6 sources other than the grant. 

7 (3) Such other information as the Secretary de8 termines to be appropriate. 

9 (d) ADDITIONAL CONTENTS OF APPLICATION.—In 

10 order to receive a grant under this section, an applicant 

11 shall meet the following conditions: 

12 (1) The applicant furnishes the following serv13 ices: 

14 (A) Diagnosis and treatment of simple ill15 nesses and minor injuries. 

16 (B) Preventive health services, including 

17 health screenings. 

18 (C) Services provided for the purpose de19 scribed in subsection (b)(2). 

20 (D) Referrals and followups in situations 

21 involving illness or injury. 

22 (E) Health and social services, counseling 

23 services, and necessary referrals, including re24 ferrals regarding mental health and substance 

25 abuse and oral health services. 

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1 (F) Such other services as the Secretary 

2 determines to be appropriate. 

3 (2) The applicant is a participating provider in 

4 the State’s program for medical assistance under 

5 title XIX of the Social Security Act. 

6 (3) The applicant does not impose charges on 

7 students or their families for services (including col8 lection of any cost-sharing for services under the 

9 comprehensive benefit package that otherwise would 

10 be required). 

11 (4) The applicant has reviewed and will periodi12 cally review the needs of the population served by 

13 the applicant in order to ensure that its services are 

14 accessible to the maximum number of school-aged 

15 children in the area, and that, to the maximum ex16 tent possible, barriers to access to services of the ap17 plicant are removed (including barriers resulting 

18 from the area’s physical characteristics, its eco19 nomic, social and cultural grouping, the health care 

20 utilization patterns of such children, and available 

21 transportation). 

22 (5) In the case of an applicant which serves a 

23 population that includes a substantial proportion of 

24 individuals of limited English speaking ability, the 

25 applicant has developed a plan to meet the needs of 

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1 such population to the extent practicable in the lan2 guage and cultural context most appropriate to such 

3 individuals. 

4 (6) The applicant will provide non-Federal con5 tributions toward the cost of the project in an 

6 amount determined by the Secretary. 

7 (7) The applicant will operate a quality assur8 ance program consistent with section 734(d). 

9 (e) DURATION OF GRANT.—A grant under this sec10 tion shall be for a period determined by the Secretary. 

11 (f) REPORTS.—A recipient of funding under this sec12 tion shall provide such reports and information as are re13 quired in regulations of the Secretary. 

14 SEC. 736. FEDERAL ADMINISTRATIVE COSTS. 

15 Of the amounts made available under section 731, the 

16 Secretary may reserve not more than 5 percent for admin17 istrative expenses regarding this subtitle. 

18 SEC. 737. DEFINITIONS. 

19 For purposes of this subtitle: 

20 (1) The term ‘‘adolescent children’’ has the 

21 meaning given such term in section 732(c). 

22 (2) The term ‘‘at risk’’ means at-risk with re23 spect to health. 

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1 (3) The term ‘‘community health center’’ has 

2 the meaning given such term in section 330 of the 

3 Public Health Service Act. 

4 (4) The term ‘‘health professional shortage 

5 area’’ means a health professional shortage area des6 ignated under section 332 of the Public Health Serv7 ice Act. 

8 (5) The term ‘‘medically underserved popu9 lation’’ has the meaning given such term in section 

10 330 of the Public Health Service Act. 

11 (6) The term ‘‘school-aged children’’ has the 

12 meaning given such term in section 732(c). 

13 TITLE VIII—FINANCING PROVI14 SIONS; AMERICAN HEALTH 

15 SECURITY TRUST FUND 

16 SEC. 800. AMENDMENT OF 1986 CODE; SECTION 15 NOT TO 

17 APPLY. 

18 (a) AMENDMENT OF 1986 CODE.—Except as other19 wise expressly provided, whenever in this title an amend20 ment or repeal is expressed in terms of an amendment 

21 to, or repeal of, a section or other provision, the reference 

22 shall be considered to be made to a section or other provi23 sion of the Internal Revenue Code of 1986. 

24 (b) SECTION 15 NOT TO APPLY.—The amendments 

25 made by subtitle B shall not be treated as a change in 

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1 a rate of tax for purposes of section 15 of the Internal 

2 Revenue Code of 1986. 

3 Subtitle A—American Health 

4 Security Trust Fund 

5 SEC. 801. AMERICAN HEALTH SECURITY TRUST FUND. 

6 (a) IN GENERAL.—There is hereby created on the 

7 books of the Treasury of the United States a trust fund 

8 to be known as the American Health Security Trust Fund 

9 (in this section referred to as the ‘‘Trust Fund’’). The 

10 Trust Fund shall consist of such gifts and bequests as 

11 may be made and such amounts as may be deposited in, 

12 or appropriated to, such Trust Fund as provided in this 

13 Act. 

14 (b) APPROPRIATIONS INTO TRUST FUND.— 

15 (1) TAXES.—There are hereby appropriated to 

16 the Trust Fund for each fiscal year (beginning with 

17 fiscal year 2013), out of any moneys in the Treasury 

18 not otherwise appropriated, amounts equivalent to 

19 100 percent of the aggregate increase in tax liabil20 ities under the Internal Revenue Code of 1986 which 

21 is attributable to the application of the amendments 

22 made by this title. The amounts appropriated by the 

23 preceding sentence shall be transferred from time to 

24 time (but not less frequently than monthly) from the 

25 general fund in the Treasury to the Trust Fund, 

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1 such amounts to be determined on the basis of esti2 mates by the Secretary of the Treasury of the taxes 

3 paid to or deposited into the Treasury; and proper 

4 adjustments shall be made in amounts subsequently 

5 transferred to the extent prior estimates were in ex6 cess of or were less than the amounts that should 

7 have been so transferred. 

8 (2) CURRENT PROGRAM RECEIPTS.—Notwith9 standing any other provision of law, there are hereby 

10 appropriated to the Trust Fund for each fiscal year 

11 (beginning with fiscal year 2013) the amounts that 

12 would otherwise have been appropriated to carry out 

13 the following programs: 

14 (A) The Medicare program, under parts A, 

15 B, and D of title XVIII of the Social Security 

16 Act (other than amounts attributable to any 

17 premiums under such parts). 

18 (B) The Medicaid program, under State 

19 plans approved under title XIX of such Act. 

20 (C) The Federal employees health benefit 

21 program, under chapter 89 of title 5, United 

22 States Code. 

23 (D) The TRICARE program (formerly 

24 known as the CHAMPUS program), under 

25 chapter 55 of title 10, United States Code. 

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1 (E) The maternal and child health pro2 gram (under title V of the Social Security Act), 

3 vocational rehabilitation programs, programs 

4 for drug abuse and mental health services 

5 under the Public Health Service Act, programs 

6 providing general hospital or medical assistance, 

7 and any other Federal program identified by 

8 the Board, in consultation with the Secretary of 

9 the Treasury, to the extent the programs pro10 vide for payment for health services the pay11 ment of which may be made under this Act. 

12 (c) INCORPORATION OF PROVISIONS.—The provisions 

13 of subsections (b) through (i) of section 1817 of the Social 

14 Security Act shall apply to the Trust Fund under this Act 

15 in the same manner as they applied to the Federal Hos16 pital Insurance Trust Fund under part A of title XVIII 

17 of such Act, except that the American Health Security 

18 Standards Board shall constitute the Board of Trustees 

19 of the Trust Fund. 

20 (d) TRANSFER OF FUNDS.—Any amounts remaining 

21 in the Federal Hospital Insurance Trust Fund or the Fed22 eral Supplementary Medical Insurance Trust Fund after 

23 the settlement of claims for payments under title XVIII 

24 have been completed, shall be transferred into the Amer25 ican Health Security Trust Fund. 

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1 Subtitle B—Taxes Based on Income 

2 and Wages 

3 SEC. 811. PAYROLL TAX ON EMPLOYERS. 

4 (a) IN GENERAL.—Section 3111 (relating to tax on 

5 employers) is amended by redesignating subsections (c) 

6 and (d) as subsection (d) and (e), respectively, and by in7 serting after subsection (b) the following new subsection: 

8 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

9 there is hereby imposed on every employer an excise tax, 

10 with respect to having individuals in his employ, equal to 

11 6.7 percent of the wages (as defined in section 3121(a)) 

12 paid by him with respect to employment (as defined in 

13 section 3121(b)).’’. 

14 (b) SELF-EMPLOYMENT INCOME.—Section 1401 (re15 lating to rate of tax on self-employment income) is amend16 ed by redesignating subsection (c) as subsection (d) and 

17 inserting after subsection (b) the following new subsection: 

18 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

19 there shall be imposed for each taxable year, on the self20 employment income of every individual, a tax equal to 6.7 

21 percent of the amount of the self-employment income for 

22 such taxable year.’’. 

23 (c) COMPARABLE TAXES FOR RAILROAD SERV24 ICES.— 

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1 (1) TAX ON EMPLOYERS.—Section 3221 is 

2 amended by redesignating subsections (c) and (d) as 

3 subsections (d) and (e), respectively, and by insert4 ing after subsection (b) the following new subsection: 

5 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

6 there is hereby imposed on every employer an excise tax, 

7 with respect to having individuals in his employ, equal to 

8 6.7 percent of the compensation paid by such employer 

9 for services rendered to such employer.’’. 

10 (2) TAX ON EMPLOYEE REPRESENTATIVES.— 

11 Section 3211 (relating to tax on employee represent12 atives) is amended by redesignating subsection (c) as 

13 subsection (d) and inserting after subsection (b) the 

14 following new paragraph: 

15 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

16 there is hereby imposed on the income of each employee 

17 representative a tax equal to 6.7 percent of the compensa18 tion received during the calendar year by such employee 

19 representative for services rendered by such employee rep20 resentative.’’. 

21 (3) NO APPLICABLE BASE.—Subparagraph (A) 

22 of section 3231(e)(2) is amended by adding at the 

23 end thereof the following new clause: 

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1 ‘‘(iv) HEALTH CARE TAXES.—Clause 

2 (i) shall not apply to the taxes imposed by 

3 sections 3221(c) and 3211(c).’’. 

4 (4) TECHNICAL AMENDMENT.— 

5 (A) Subsection (d) of section 3211, as re6 designated by paragraph (2), is amended by 

7 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

8 (c)’’. 

9 (B) Subsection (d) of section 3221, as re10 designated by paragraph (1), is amended by 

11 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

12 (c)’’. 

13 (d) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to remuneration paid after Decem15 ber 31, 2012. 

16 SEC. 812. HEALTH CARE INCOME TAX. 

17 (a) GENERAL RULE.—Subchapter A of chapter 1 (re18 lating to determination of tax liability) is amended by add19 ing at the end thereof the following new part: 

20 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A.—HEALTH CARE INCOME TAX ON INDIVIDUALS. 

21 ‘‘Subpart A—Health Care Income Tax on Individuals 

‘‘Sec. 59B. Health care income tax. 

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1 ‘‘SEC. 59B. HEALTH CARE INCOME TAX. 

2 ‘‘(a) IMPOSITION OF TAX.—In the case of an indi3 vidual, there is hereby imposed a tax (in addition to any 

4 other tax imposed by this subtitle) equal to the applicable 

5 amount with respect to the taxpayer for the taxable year. 

6 ‘‘(b) APPLICABLE AMOUNT.—For purposes of this 

7 section— 

8 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

9 not described in paragraph (2), the applicable 

10 amount with respect to any taxable year shall be de11 termined in accordance with the following table: 

‘‘If taxable income is: The applicable amount is: 

Not over $200,000 ........................ 2.2% of taxable income 

Over $200,000 but not over 

$400,000.

$4,400, plus 3.2% of the excess over 

$200,000 

Over $400,000 but not over 

$600,000.

$10,800, plus 4.2% of the excess over 

$400,000 

Over $600,000 ............................... $19,200, plus 5.2% of the excess over 

$600,000. 

12 ‘‘(2) JOINT RETURNS AND SURVIVING

13 SPOUSES.—In the case of a joint return or a sur14 viving spouse (as defined in section 2(a)), the appli15 cable amount with respect to any taxable year shall 

16 be determined in accordance with the following 

17 table: 

‘‘If taxable income is: The applicable amount is: 

Not over $250,000 ........................ 2.2% of taxable income 

Over $250,000 but not over 

$400,000.

$5,500, plus 3.2% of the excess over 

$250,000 

Over $400,000 but not over 

$600,000.

$10,300, plus 4.2% of the excess over 

$400,000 

Over $600,000 ............................... $18,700, plus 5.2% of the excess over 

$600,000. 

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1 ‘‘(3) INFLATION ADJUSTMENT.— 

2 ‘‘(A) IN GENERAL.—In the case of any 

3 taxable year beginning after 2013, each of the 

4 dollar amounts in the tables contained in para5 graphs (1) and (2) shall be increased by an 

6 amount equal to— 

7 ‘‘(i) such dollar amount, multiplied by 

8 ‘‘(ii) the cost-of-living adjustment de9 termined under section 1(f)(3) for the cal10 endar year in which the taxable year be11 gins, determined by substituting ‘calendar 

12 year 2012’ for ‘calendar year 1992’ in sub13 paragraph (B) thereof. 

14 ‘‘(B) ROUNDING.—If any amount after ad15 justment under subparagraph (A) is not a mul16 tiple of $1,000, such amount shall be rounded 

17 to the next lowest multiple of $1,000. 

18 ‘‘(c) NO CREDITS AGAINST TAX; NO EFFECT ON

19 MINIMUM TAX.—The tax imposed by this section shall not 

20 be treated as a tax imposed by this chapter for purposes 

21 of determining— 

22 ‘‘(1) the amount of any credit allowable under 

23 this chapter, or 

24 ‘‘(2) the amount of the minimum tax imposed 

25 by section 55. 

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1 ‘‘(d) SPECIAL RULES.— 

2 ‘‘(1) TAX TO BE WITHHELD, ETC.—For pur3 poses of this title, the tax imposed by this section 

4 shall be treated as imposed by section 1. 

5 ‘‘(2) REIMBURSEMENT OF TAX BY EMPLOYER

6 NOT INCLUDIBLE IN GROSS INCOME.—The gross in7 come of an employee shall not include any payment 

8 by his employer to reimburse the employee for the 

9 tax paid by the employee under this section. 

10 ‘‘(3) OTHER RULES.—The rules of section 

11 59A(d) shall apply to the tax imposed by this sec12 tion.’’. 

13 (b) CLERICAL AMENDMENT.—The table of parts for 

14 subchapter A of chapter 1 is amended by adding at the 

15 end the following new item: 

‘‘PART VIII—HEALTH CARE RELATED TAXES’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2012. 

19 SEC. 813. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

20 (a) IN GENERAL.—Part VIII of subchapter A of 

21 chapter 1, as added by this title, is amended by adding 

22 at the end the following new subpart: 

23 ‘‘Subpart B—Surcharge on High Income Individuals 

‘‘Sec. 59C. Surcharge on high income individuals. 

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1 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

2 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

3 other than a corporation, there is hereby imposed (in addi4 tion to any other tax imposed by this subtitle) a tax equal 

5 to 5.4 percent of so much of the modified adjusted gross 

6 income of the taxpayer as exceeds $1,000,000. 

7 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

8 In the case of any taxpayer other than a taxpayer making 

9 a joint return under section 6013 or a surviving spouse 

10 (as defined in section 2(a)), subsection (a) shall be applied 

11 by substituting ‘$500,000’ for ‘$1,000,000’. 

12 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 

13 purposes of this section, the term ‘modified adjusted gross 

14 income’ means adjusted gross income reduced by any de15 duction (not taken into account in determining adjusted 

16 gross income) allowed for investment interest (as defined 

17 in section 163(d)). In the case of an estate or trust, ad18 justed gross income shall be determined as provided in sec19 tion 67(e). 

20 ‘‘(d) SPECIAL RULES.— 

21 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

22 nonresident alien individual, only amounts taken 

23 into account in connection with the tax imposed 

24 under section 871(b) shall be taken into account 

25 under this section. 

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1 ‘‘(2) CITIZENS AND RESIDENTS LIVING

2 ABROAD.—The dollar amount in effect under sub3 section (a) (after the application of subsection (b)) 

4 shall be decreased by the excess of— 

5 ‘‘(A) the amounts excluded from the tax6 payer’s gross income under section 911, over 

7 ‘‘(B) the amounts of any deductions or ex8 clusions disallowed under section 911(d)(6) 

9 with respect to the amounts described in sub10 paragraph (A). 

11 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

12 shall not apply to a trust all the unexpired interests 

13 in which are devoted to one or more of the purposes 

14 described in section 170(c)(2)(B). 

15 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

16 CHAPTER FOR CERTAIN PURPOSES.—The tax im17 posed under this section shall not be treated as tax 

18 imposed by this chapter for purposes of determining 

19 the amount of any credit under this chapter or for 

20 purposes of section 55.’’. 

21 (b) CLERICAL AMENDMENT.—The table of subparts 

22 for part VIII of subchapter A of chapter 1, as added by 

23 this title, is amended by inserting after the item relating 

24 to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS.’’. 

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1 (c) SECTION 15 NOT TO APPLY.—The amendment 

2 made by subsection (a) shall not be treated as a change 

3 in a rate of tax for purposes of section 15 of the Internal 

4 Revenue Code of 1986. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2012. 

8 Subtitle C—Other Financing 

9 Provisions 

10 SEC. 821. TAX ON SECURITIES TRANSACTIONS. 

11 (a) IN GENERAL.—Chapter 36 is amended by insert12 ing after subchapter B the following new subchapter: 

13 ‘‘Subchapter C—Tax on Securities 

14 Transactions 

‘‘Sec. 4475. Tax on securities transactions. 

15 ‘‘SEC. 4475. TAX ON SECURITIES TRANSACTIONS. 

16 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 

17 a tax on each covered transaction with respect to any secu18 rity. 

19 ‘‘(b) RATE OF TAX.— 

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the rate of such tax shall 

22 be equal to 0.02 percent of the fair market value of 

23 the security. 

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1 ‘‘(2) SWAPS.—In the case of a security de2 scribed in subsection (d)(1)(D), the rate of such tax 

3 shall be equal to 0.02 percent of the fair market 

4 value of the underlying property with respect to, or 

5 the notional principal amount of, the security-based 

6 swap involved in such transaction. 

7 ‘‘(3) SHORT-TERM DEBT INSTRUMENTS.—In 

8 the case of a covered transaction with respect to a 

9 security described in subsection (d)(1)(C) which has 

10 a fixed maturity date not more than 1 year from the 

11 date of issue, the rate of such tax shall be equal to 

12 0.02 percent of the fair market value of such secu13 rity. 

14 ‘‘(c) COVERED TRANSACTION.—For purposes of this 

15 section, the term ‘covered transaction’ means— 

16 ‘‘(1) except as provided in paragraph (2), any 

17 purchase if— 

18 ‘‘(A) such purchase occurs on a trading fa19 cility located in the United States, or 

20 ‘‘(B) the purchaser or seller is a United 

21 States person, or 

22 ‘‘(2) any transaction with respect to a security 

23 described in subsection (d)(1)(D), if any party with 

24 rights under such security is a United States person 

25 or if such transaction is facilitated by a United 

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1 States person, including a trading facility located in 

2 the United States or a broker. 

3 ‘‘(d) SECURITY AND OTHER DEFINITIONS.—For pur4 poses of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘security’ has the 

6 meaning given such term by section 2(a)(1) of the 

7 Securities Act of 1933 (15 U.S.C. 77b(a)(1)). 

8 ‘‘(2) SECURITY-BASED SWAP.—The term ‘secu9 rity-based swap’ means any option, forward contract, 

10 short position, notional principal contract, credit de11 fault swap, or any similar financial instrument. 

12 ‘‘(3) SPECIFIED INDEX.—The term ‘specified 

13 index’ means any 1 or more of any combination of— 

14 ‘‘(A) a fixed rate, price, or amount, or 

15 ‘‘(B) a variable rate, price, or amount,

16 which is based on any current objectively deter17 minable information which is not within the control 

18 of any of the parties to the contract or instrument 

19 and is not unique to any of the parties’ cir20 cumstances. 

21 ‘‘(e) EXCEPTIONS TO IMPOSITION OF TAX.— 

22 ‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 

23 shall be imposed under subsection (a) on any cov24 ered transaction with respect to the initial issuance 

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1 of any security described in subparagraph (A), (B), 

2 or (C) of subsection (d)(1). 

3 ‘‘(2) EXCEPTION FOR RETIREMENT ACCOUNTS, 

4 ETC.—No tax shall be imposed under subsection (a) 

5 on any covered transaction with respect to any secu6 rity which is held in any plan, account, or arrange7 ment described in section 220, 223, 401(a), 403(a), 

8 403(b), 408, 408A, 529, or 530 (including assets 

9 held in a segregated asset account described in sec10 tion 817 as part of any such plan, account, or ar11 rangement). 

12 ‘‘(3) EXCEPTION FOR CERTAIN MUTUAL FUND

13 TRANSACTIONS.—No tax shall be imposed under 

14 subsection (a) on any covered transaction— 

15 ‘‘(A) with respect to the purchase of any 

16 interest in a regulated investment company (as 

17 defined in section 851) which issues only stock 

18 which is redeemable on the demand of the stock 

19 holder, 

20 ‘‘(B) by a regulated investment company 

21 (as so defined) which is 100 percent owned by 

22 1 or more plans, accounts, or arrangements de23 scribed in paragraph (2), and 

24 ‘‘(C) to the extent such tax is properly al25 locable to any class of shares of a regulated inmstockstill on DSKH9S0YB1PROD with BILLS

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1 vestment company (as so defined) which is 100 

2 percent owned by 1 or more plans, accounts, or 

3 arrangements described in paragraph (2). 

4 ‘‘(f) BY WHOM PAID.— 

5 ‘‘(1) IN GENERAL.—The tax imposed by this 

6 section shall be paid by— 

7 ‘‘(A) in the case of a transaction which oc8 curs on a trading facility located in the United 

9 States, such trading facility, 

10 ‘‘(B) in the case of a transaction not de11 scribed in subparagraph (A) which is executed 

12 by a broker, such broker, 

13 ‘‘(C) in the case of a transaction not de14 scribed in subparagraph (A) or (B), with re15 spect to a security described in section 

16 (d)(1)(D), the party identified by the Secretary, 

17 or 

18 ‘‘(D) in any other case, the purchaser with 

19 respect to the transaction. 

20 ‘‘(2) WITHHOLDING IF PURCHASER IS NOT A

21 UNITED STATES PERSON.—See section 1447 for 

22 withholding by seller if purchaser is a foreign per23 son. 

24 ‘‘(g) ADMINISTRATION.—The Secretary shall carry 

25 out this section in consultation with the Securities and Exmstockstill on DSKH9S0YB1PROD with BILLS

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1 change Commission and the Commodity Futures Trading 

2 Commission. 

3 ‘‘(h) GUIDANCE; REGULATIONS.—The Secretary 

4 shall— 

5 ‘‘(1) provide guidance regarding such informa6 tion reporting concerning covered transactions as the 

7 Secretary deems appropriate, and 

8 ‘‘(2) prescribe such regulations as are necessary 

9 or appropriate to prevent avoidance of the purposes 

10 of this section, including the use of non-United 

11 States persons in such transactions or the improper 

12 allocation of taxes to classes of shares described in 

13 subsection (e)(3)(C).’’. 

14 (b) CREDIT FOR FIRST $100,000 OF STOCK TRANS15 ACTIONS PER YEAR.—Subpart C of part IV of subchapter 

16 A of chapter 1 is amended by inserting after section 36A 

17 the following new section: 

18 ‘‘SEC. 36B. CREDIT FOR SECURITIES TRANSACTION TAXES. 

19 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

20 purchaser with respect to a covered transaction, there 

21 shall be allowed as a credit against the tax imposed by 

22 this subtitle for the taxable year an amount equal to the 

23 lesser of— 

24 ‘‘(1) the aggregate amount of tax imposed 

25 under section 4475 on covered transactions during 

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1 the taxable year with respect to which the taxpayer 

2 is the purchaser, or 

3 ‘‘(2) $250 ($500 in the case of a joint return). 

4 ‘‘(b) AGGREGATION RULE.—For purposes of this sec5 tion, all persons treated as a single employer under sub6 section (a) or (b) of section 52, or subsection (m) or (o) 

7 of section 414, shall be treated as one taxpayer. 

8 ‘‘(c) DEFINITIONS.—For purposes of this section, 

9 any term used in this section which is also used in section 

10 4475 shall have the same meaning as when used in section 

11 4475.’’. 

12 (c) WITHHOLDING.—Subchapter A of chapter 3 is 

13 amended by adding at the end the following new section: 

14 ‘‘SEC. 1447. WITHHOLDING ON SECURITIES TRANSACTIONS. 

15 ‘‘(a) IN GENERAL.—In the case of any outbound se16 curities transaction, the transferor shall deduct and with17 hold a tax equal to the tax imposed under section 4475 

18 with respect to such transaction. 

19 ‘‘(b) OUTBOUND SECURITIES TRANSACTION.—For 

20 purposes of this section, the term ‘outbound securities 

21 transaction’ means any covered transaction to which sec22 tion 4475(a) applies if— 

23 ‘‘(1) such transaction does not occur on a trad24 ing facility located in the United States, and 

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1 ‘‘(2) the purchaser with respect to such trans2 action in not a United States person.’’. 

3 (d) CONFORMING AMENDMENTS.— 

4 (1) Section 6211(b)(4)(A) is amended by insert5 ing ‘‘36B,’’ after ‘‘36A,’’. 

6 (2) Section 1324(b)(2) of title 31, United 

7 States Code, is amended by inserting ‘‘36B,’’ after 

8 ‘‘36A,’’. 

9 (3) The table of subchapters for chapter 36 is 

10 amended by inserting after the item relating to sub11 chapter B the following new item: 

‘‘Subchapter C. Tax on securities transactions.’’. 

12 (4) The table of sections for subchapter A of 

13 chapter 3 is amended by adding at the end the fol14 lowing new item: 

‘‘Sec. 1447. Withholding on securities transactions.’’. 

15 (5) The table of sections for subpart C of part 

16 IV of subchapter A of chapter 1 is amended by in17 serting after the item relating to section 36A the fol18 lowing new item: 

‘‘Sec. 36B. Credit for securities transaction taxes.’’. 

19 (e) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to transactions occurring more 

21 than 180 days after the date of the enactment of this Act. 

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1 TITLE IX—CONFORMING AMEND2 MENTS TO THE EMPLOYEE 

3 RETIREMENT INCOME SECU4 RITY ACT OF 1974 

5 SEC. 901. ERISA INAPPLICABLE TO HEALTH COVERAGE AR6 RANGEMENTS UNDER STATE HEALTH SECU7 RITY PROGRAMS. 

8 Section 4 of the Employee Retirement Income Secu9 rity Act of 1974 (29 U.S.C. 1003) is amended— 

10 (1) in subsection (a), by striking ‘‘(b) or (c)’’ 

11 and inserting ‘‘(b), (c), or (d)’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(d) The provisions of this title shall not apply to 

15 any arrangement forming a part of a State health security 

16 program established pursuant to section 101(b) of the 

17 American Health Security Act of 2011.’’. 

18 SEC. 902. EXEMPTION OF STATE HEALTH SECURITY PRO19 GRAMS FROM ERISA PREEMPTION. 

20 Section 514(b) of the Employee Retirement Income 

21 Security Act of 1974 (29 U.S.C. 1144(b)) (as amended 

22 by sections 904(b)(3)(B) and 1002(b) of this Act) is 

23 amended by adding at the end the following new para24 graph: 

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1 ‘‘(10) Subsection (a) of this section shall not apply 

2 to State health security programs established pursuant to 

3 section 101(b) of the American Health Security Act of 

4 2011.’’. 

5 SEC. 903. PROHIBITION OF EMPLOYEE BENEFITS DUPLICA6 TIVE OF BENEFITS UNDER STATE HEALTH 

7 SECURITY PROGRAMS; COORDINATION IN 

8 CASE OF WORKERS’ COMPENSATION. 

9 (a) IN GENERAL.—Part 5 of subtitle B of title I of 

10 the Employee Retirement Income Security Act of 1974 is 

11 amended by adding at the end the following new section: 

12 ‘‘PROHIBITION OF EMPLOYEE BENEFITS DUPLICATIVE OF

13 STATE HEALTH SECURITY PROGRAM BENEFITS; CO14 ORDINATION IN CASE OF WORKERS’ COMPENSATION

15 ‘‘SEC. 522. (a) Subject to subsection (b), no employee 

16 benefit plan may provide benefits which duplicate payment 

17 for any items or services for which payment may be made 

18 under a State health security program established pursu19 ant to section 101(b) of the American Health Security Act 

20 of 2011. 

21 ‘‘(b)(1) Each workers compensation carrier that is 

22 liable for payment for workers compensation services fur23 nished in a State shall reimburse the State health security 

24 plan for the State in which the services are furnished for 

25 the cost of such services. 

26 ‘‘(2) In this subsection: 

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1 ‘‘(A) The term ‘workers compensation carrier’ 

2 means an insurance company that underwrites work3 ers compensation medical benefits with respect to 1 

4 or more employers and includes an employer or fund 

5 that is financially at risk for the provision of work6 ers compensation medical benefits. 

7 ‘‘(B) The term ‘workers compensation medical 

8 benefits’ means, with respect to an enrollee who is 

9 an employee subject to the workers compensation 

10 laws of a State, the comprehensive medical benefits 

11 for work-related injuries and illnesses provided for 

12 under such laws with respect to such an employee. 

13 ‘‘(C) The term ‘workers compensation services’ 

14 means items and services included in workers com15 pensation medical benefits and includes items and 

16 services (including rehabilitation services and long17 term-care services) commonly used for treatment of 

18 work-related injuries and illnesses.’’. 

19 (b) CONFORMING AMENDMENT.—Section 4(b) of 

20 such Act (29 U.S.C. 1003(b)) is amended by adding at 

21 the end the following: ‘‘Paragraph (3) shall apply subject 

22 to section 522(b) (relating to reimbursement of State 

23 health security plans by workers compensation carriers).’’. 

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1 (c) CLERICAL AMENDMENT.—The table of contents 

2 in section 1 of such Act is amended by inserting after the 

3 item relating to section 521 the following new items: 

‘‘Sec. 522. Prohibition of employee benefits duplicative of state health security 

program benefits; coordination in case of workers’ compensation.’’. 

4 SEC. 904. REPEAL OF CONTINUATION COVERAGE REQUIRE5 MENTS UNDER ERISA AND CERTAIN OTHER 

6 REQUIREMENTS RELATING TO GROUP 

7 HEALTH PLANS. 

8 (a) IN GENERAL.—Part 6 of subtitle B of title I of 

9 the Employee Retirement Income Security Act of 1974 

10 (29 U.S.C. 1161 et seq.) is repealed. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 502(a) of such Act (29 U.S.C. 

13 1132(a)) is amended— 

14 (A) by striking paragraph (7); and 

15 (B) by redesignating paragraphs (8), (9), 

16 and (10) as paragraphs (7), (8), and (9), re17 spectively. 

18 (2) Section 502(c)(1) of such Act (29 U.S.C. 

19 1132(c)(1)) is amended by striking ‘‘paragraph (1) 

20 or (4) of section 606,’’. 

21 (3) Section 514(b) of such Act (29 U.S.C. 

22 1144(b)) is amended— 

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1 (A) in paragraph (7), by striking ‘‘section 

2 206(d)(3)(B)(i)),’’ and all that follows and in3 serting ‘‘section 206(d)(3)(B)(i)).’’; and 

4 (B) by striking paragraph (8). 

5 (4) The table of contents in section 1 of the 

6 Employee Retirement Income Security Act of 1974 

7 is amended by striking the items relating to part 6 

8 of subtitle B of title I of such Act. 

9 SEC. 905. EFFECTIVE DATE OF TITLE. 

10 The amendments made by this title shall take effect 

11 January 1, 2014. 

12 TITLE X—ADDITIONAL 

13 CONFORMING AMENDMENTS 

14 SEC. 1001. REPEAL OF CERTAIN PROVISIONS IN INTERNAL 

15 REVENUE CODE OF 1986. 

16 The provisions of titles III and IV of the Health In17 surance Portability and Accountability Act of 1996, other 

18 than subtitles D and H of title III and section 342, are 

19 repealed and the provisions of law that were amended or 

20 repealed by such provisions are hereby restored as if such 

21 provisions had not been enacted. 

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1 SEC. 1002. REPEAL OF CERTAIN PROVISIONS IN THE EM2 PLOYEE RETIREMENT INCOME SECURITY 

3 ACT OF 1974. 

4 (a) IN GENERAL.—Part 7 of subtitle B of title I of 

5 the Employee Retirement Income Security Act of 1974 is 

6 repealed and the items relating to such part in the table 

7 of contents in section 1 of such Act are repealed. 

8 (b) CONFORMING AMENDMENT.—Section 514(b) of 

9 such Act (29 U.S.C. 1144(b)) is amended by striking 

10 paragraph (9). 

11 SEC. 1003. REPEAL OF CERTAIN PROVISIONS IN THE PUB12 LIC HEALTH SERVICE ACT AND RELATED 

13 PROVISIONS. 

14 (a) IN GENERAL.—Titles XXII and XXVII of the 

15 Public Health Service Act are repealed. 

16 (b) ADDITIONAL AMENDMENTS.— 

17 (1) Section 1301(b) of such Act (42 U.S.C. 

18 300e(b)) is amended by striking paragraph (6). 

19 (2) Sections 104 and 191 of the Health Insur20 ance Portability and Accountability Act of 1996 are 

21 repealed. 

22 SEC. 1004. EFFECTIVE DATE OF TITLE. 

23 The amendments made by this title shall take effect 

24 January 1, 2015. 

Æ 

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